Supreme Court of the ACT|2016-08-05|Before: Penfold J

Strano v Australian Capital Territory (No 2) [2016] ACTSC 206 (5 August 2016)

Judgment for the defendant on the plaintiff's claim for compensation begun in the Magistrates Court by Originating Claim dated 19 December 2012.
The plaintiff is to pay the defendant's costs.

PROCEDURE - Costs - court's discretion to make no order as to costs in a "test case" - whether plaintiff's action a "test case" - proceedings asserted to be for the primary objective of testing scope of statutory cause of action under Human Rights Act in comparison to common law action for wrongful imprisonment - relevance of plaintiff seeking compensation to determination of whether action a "test case" - action not a "test case" - plaintiff to pay defendant's costs.

Andrews v Australia and New Zealand Banking Group Ltd [2012] HCA 30; (2012) 247 CLR 205

Attrill v Richmond River Shire Council (1995) 38 NSWLR 545

Barlow v The Law Society of the Australian Capital Territory [No 2] [2013] ACTSC 82

CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1

Insurance Australia Ltd & Anor v Albrecht (No 2) [2015] ACTSC 94

Jacka v Australian Capital Territory [2015] ACTSC 239

Morro and Ors v Australian Capital Territory [2009] ACTSC 118; (2009) 234 FLR 71

Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

Sluggett v Human Rights & Equal Opportunity Commission [2002] FCA 1060

State of South Australia v Lampard-Trevorrow [2008] SASC 370

Strano v Australian Capital Territory [2016] ACTSC 4

1. On 2 February 2016 I delivered judgment in the matter of Strano v Australian Capital Territory [2016] ACTSC 4. The plaintiff had claimed compensation from the ACT for what he said was unlawful imprisonment for a period of three months in 2005. The claim was based on a cause of action said to arise under s 18(7) of the Human Rights Act 2004 (ACT) independent of the common law tort of false imprisonment. In a strike-out application brought by the ACT, I concluded that, whatever the nature of the plaintiff's claim against the ACT, it had been filed after the expiry of the relevant limitation period and could not be maintained.

2. On 10 February 2016 I heard the parties on the orders that would be necessary to give effect to my judgment of 2 February 2016. On that day the defendant submitted that the appropriate order would be judgment in favour of the defendant. The plaintiff did not consent to this order, but nor did he make submissions opposing it. I shall make this order to finalise the proceedings.

3. Also at the 10 February hearing, counsel for the plaintiff made oral submissions about the appropriate costs order, suggesting that there should be no order for costs.

4. However, because I was also listed to sit in the Court of Appeal that day, there was no time for me to hear oral submissions from the defendant. It was accordingly agreed that the defendant would file written submissions, and the plaintiff would file in writing any submissions he wished to make in reply. No submissions in reply were filed.

5. The plaintiff's claim had been initiated in the Magistrates Court, and was removed to the Supreme Court by consent. It seems that the original impetus for the removal had come from the defendant, because of the significance in the case of a magistrate's allegedly incorrect sentencing of the plaintiff. However, counsel for the plaintiff said that there was an interest in having the matter heard in a court that would not be bound by the relevant parts of the decision in Morro and Ors v Australian Capital Territory [2009] ACTSC 118; (2009) 234 FLR 71 (Morro) if it considered that decision incorrect.

6. Counsel for the plaintiff sought that no costs orders be made.

7. The submissions made on behalf of the plaintiff can be summarised as follows:

(a) In a test case, the court has a discretion to make no order for costs.

(b) The plaintiff's case was crafted specifically to test the operation of s 18(7) of the Human Rights Act, and should be accepted as a "test case" having regard to:

(i) a claimed ambiguity about the operation of s 18(7) of the Human Rights Act, arising from the decision in Morro, that had among other things been identified in academic commentary;

(ii) the fact that if the plaintiff had been successful the decision would have clarified the existence of a new cause of action; and

(iii) the fact that the new cause of action "would have been available to the public at large".

(c) Because the case was a test case, no costs order should be made against the plaintiff.

8. The defendant's argument in support of a costs order in its favour can be summarised as follows:

(a) In the ordinary course of events, a successful party to litigation is entitled to a costs order in its favour.

(b) A test case may be an exception to that general approach, and may in the court's discretion permit an order that each party bears its own costs (usually expressed as "no order as to costs").

(c) A case does not become a test case simply by being identified by a party as such.

(d) A test case must be one:

(i) which resolves a conflict of authority within or across superior courts; and

(ii) in which the interests of the parties are of secondary importance to the benefit that will be directly provided to a number of others as a result of the resolution of the relevant issue.

(e) The fact that a party is seeking compensation or damages militates against the case being a test case.

(f) This case is not a test case, and there is no reason for the court not to make the usual costs order in favour of the successful party.

9. Counsel for the defendant cited Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 (Oshlack) at [67]- [98] as authority for the proposition that, subject to limited exceptions, a successful party to litigation will be entitled to costs in its favour. I do not understand this to be disputed.

10. The High Court in Oshlack at [71] identified litigation involving a "complex of factors involving or arising out of the public interest" as a possible exception to the general approach, which may at the court's discretion justify an order that each party bear its own costs.

11. Counsel for the plaintiff submitted that the court has a discretion to make no order for costs where an action is correctly characterised as a test case (relying on Barlow v The Law Society of the Australian Capital Territory [No 2] [2013] ACTSC 82 at [10] (Barlow); State of South Australia v Lampard-Trevorrow [2008] SASC 370 at [31] and [47]; Jacka v Australian Capital Territory [2015] ACTSC 239 (Jacka) at [32]).

12. The defendant did not dispute the existence of a discretion to make no order for costs in a test case.

13. For a definition of a test case, counsel for the plaintiff turned to Jacka, in which at [32] the Court of Appeal adopted Mossop AssJ's observations in Insurance Australia Ltd & Anor v Albrecht (No 2) [2015] ACTSC 94 at [5]), that "test case" is often used to describe a case that is:

used as a vehicle designed to test the operation of a specific statutory provision or legal principle where the outcome of the individual case is of less significance than the principle of broader application that it establishes.

14. The court in Jacka also adopted Mossop AssJ's further comments:

Where a party with significant resources, for whom the wider principle is of significance, brings such a case, that broader significance is something to be considered in exercising the discretion in relation to costs with the result that a party "dragged into" such a case may be treated more favourably than he or she otherwise would.

15. This case, on the other hand, involves a party with significant resources being "dragged into" a case that, at the very least, offered the possibility of a significant benefit for the plaintiff personally, and the remote possibility that at some time in the future, provided of course that there had been no intervening amendment of the relevant legislation, another plaintiff with a stale claim for wrongful imprisonment would be able to rely on the decision in the plaintiff's case.

16. The defendant cited the cases of Attrill v Richmond River Shire Council (1995) 38 NSWLR 545 at 556B and CSR Limited v Eddy [2005] HCA 64; (2005) 226 CLR 1 at [81], in support of the proposition that:

litigation cannot properly be characterised as a "test case" unless it is designed to resolve a conflict of authority within or across superior (or appellate) courts.

17. Both the cases cited involved conflicts within or across superior courts, which were held to justify the cases being treated as test cases. Neither of those cases, however, seems to be authority for the proposition that only cases "designed to resolve a conflict of authority within or across superior (or appellate) courts" may be treated as test cases for costs purposes.

18. Counsel for the defendant relied on Barlow at [11] and [12] as authority for the further proposition that in order for an action to be properly characterised as a test case, the implications of the litigation for the parties themselves must be of secondary importance to the settlement of an issue "that will be of direct benefit to a number of others". Counsel further submitted that a plaintiff seeking compensation or damages militates against a matter correctly being characterised as a test case (Sluggett v Human Rights & Equal Opportunity Commission [2002] FCA 1060 at [12]).

19. In seeking to characterise the plaintiff's action as a test case, counsel submitted that the precise import of s 18(7) of the Human Rights Act had been ambiguous following the judgment of Gray J in Morro. In that case, which involved claims under the common law and under the Human Rights Act, Gray J had expressed a conclusion that s 18(7) of the Human Rights Act created a substantive statutory right to compensation, but went on to assess the damages claimed in accordance with the common law relating to damages for false imprisonment.

this case does fit the definition of a test case. It's been crafted to test the application of a provision of the Human Rights Act. If it had been successful it would have clarified the existence of a new cause of action that would have been available to the public at large.

21. One of the problems with counsel's claim that the action had been structured as a test case is that because the claim was filed outside the limitation period for the common law tortious claim, there was a risk (as indeed eventuated) that the matter could be determined on a limitation issue without any determination of the nature or incidents (or even the existence) of the posited Human Rights Act cause of action, except as regards the assertion that, if the cause of action did exist, there was a different limitation period for making a claim in reliance on it, and that the different limitation period had not yet expired.

22. The assertion that the plaintiff's claim was crafted to ensure the determination of an outstanding legal controversy depended on the fact, emphasised by counsel, that the only cause of action pleaded was that which was said to arise from s 18(7) of the Human Rights Act. He submitted that even if the plaintiff had not been barred by an expired limitation period from pursuing a tortious remedy for wrongful imprisonment, he would still only have pleaded an action pursuant to s 18(7), because his main interest was in testing the Human Rights Act provision. Counsel conceded that the plaintiff had sought compensation, but maintained that testing s 18(7) of the Human Rights Act was the primary objective underpinning his action.

23. In argument, counsel asserted that, even if the tortious claim had not been apparently statute-barred, his client "would have taken [his] chances on missing out on ... a tort remedy in order to test the human rights claim". That is, counsel said, the plaintiff's claim would still have been confined to the Human Rights Act claim, because "it's simply the way the pleadings have been structured." Counsel reiterated that, although a person in the plaintiff's position would want damages, the "primary objective in bringing this case had been to try and determine whether or not such a cause of action could be brought under the Human Rights Act." Furthermore, he said, despite the fact that Gray J in Morro had expressed the view that the wrongful imprisonment tort was available in the relevant class of cases, "the public at large" needed a resolution of the question of the relationship between the tort and the action under the Human Rights Act, and whether the two actions differed in substance.

24. Counsel for the plaintiff also pointed out that the plaintiff had consented to the matter being removed to the Supreme Court, for the reasons mentioned at [5] above, even though the quantum of damages sought by the plaintiff fell well within the jurisdiction of the Magistrates Court.

25. Finally, counsel for the plaintiff said that "the Morro decision had been the subject of some academic discussion ... in published journals", that discussion apparently suggesting that the decision involved some kind of ambiguity, possibly about how the Human Rights Act action differed from the tort. An unidentified person had apparently taken a view that a case in which the tort action was not available would provide a suitable vehicle to explore that issue. I note in passing that none of this academic discussion had been drawn to my attention in connection with the plaintiff's substantive action, and nor was it further identified in the context of the costs argument.

(a) it is not sufficient for a party merely to identify proceedings as "public interest litigation" to avoid an adverse costs order; and

(b) similarly, merely describing a case as a test case will not meet the public interest threshold.

27. Counsel for the defendant further submitted that the plaintiff's claim could not be correctly characterised as a test case, because:

(a) the application of s 18(7) of the Human Rights Act was not the subject of conflicting authority;

(b) the plaintiff's case had included a claim for compensation; and

(c) the plaintiff had had no alternative in his pursuit of compensation but to "'chance his arm' with a speculative cause of action", because any claim in false imprisonment at common law was statute-barred before he instituted his action.

28. Counsel submitted that in these circumstances there was no justification for the Court to depart from the usual approach to costs orders, and that an order for costs ought to be made against the plaintiff.

29. First, I am not convinced by the defence submission (at [18] above) that seeking compensation or damages militates against the characterisation of a plaintiff's action as a test case. Nor does that proposition seem to be necessarily implied by the relevant paragraphs in Barlow, which are as follows:

The problem with the submission, however, is that this was not a test case. A test case has been described by Hunt JA in Vriend v Alberta (1996) 141 DLR (4th) 44 at 53 as follows:

a case where the parties seek primarily to settle a point of law, and where the impact of that rule on those parties is of secondary importance to the settlement of the rule itself.

Accordingly, a test case is likely to benefit directly a significant number of others who are similarly affected by the same rule as described by Heydon JA in A Goninan & Co Ltd v Gill [2001] NSWCA 77; (2001) 51 NSWLR 441 at 459-60; [60].

30. I note first that the reference to the parties seeking "primarily to settle a point of law" does not mean that any case that is decided on a point of law is therefore a test case.

31. I am also not convinced that the fact that a plaintiff may benefit from succeeding in an action as such detracts significantly from the scope for identifying it as a test case. It is not clear to me that a test case could be properly constituted if it involved a plaintiff who had no interest in the outcome of the matter.

32. The real question may be one of the relative significance of the plaintiff's own success and of the outcome of the case more broadly. It is worth noting that test cases intended to benefit individual members of the community commonly involve a situation in which, apart from the plaintiff, there are many other people immediately affected by the relevant question of law who would also be benefited by the plaintiff's success in the case (see for instance Rowe v Electoral Commissioner (2010) 243 CLR 1, and recent litigation brought by customers relating to bank fees and charges, of which Andrews v Australia and New Zealand Banking Group Ltd [2012] HCA 30; (2012) 247 CLR 205 is an example).

33. Apart from this, however, I am not persuaded by the submissions of counsel for the plaintiff. The plaintiff's asserted wish, to clarify a very specific aspect of the Morro judgment, in the interests of members of the public whose wrongful imprisonment claims may need to be brought out of time, may be commendable, but it does not render the proceedings a test case. Nor does the asserted need to resolve an unidentified ambiguity, possibly about how the Human Rights Act action differed from the tort, that has apparently been exercising the minds of unidentified commentators since the Morro decision.

34. Since Gray J had indicated a conclusion that the Human Rights Act action did exist and was available, it is not clear that any individual plaintiff with a claim of unlawful imprisonment needed the Morro decision revisited; the only body with an obvious interest in a review of Morro would seem to have been the ACT. What the plaintiff needed, specifically in his own interests, was an expansion of the Morro decision to identify or recognise a characteristic of the Human Rights Act claim that meant that the limitation period for the plaintiff's claim had not expired before he filed the claim.

35. I cannot see that the particular difficulty faced by the plaintiff in seeking compensation for his unlawful imprisonment was in any sense a matter that needed resolving in the public interest.

36. Nor does the plaintiff's willingness to have the matter transferred to the Supreme Court help his argument. Presumably the removal of the matter from the Magistrates Court, to the extent that it was done because of the Magistrates Court's involvement in the original erroneous sentencing, was to the benefit of both parties, as well as having the advantage relating to the capacity of the Supreme Court to depart from Morro to the extent necessary to uphold (or possibly reject) the plaintiff's claim. I cannot see that either of these factors operates to turn the plaintiff's action into a test case or otherwise to entitle the plaintiff to any particular concession in relation to costs.

37. This was not a test case in any proper sense of the word. One can only hope that the plaintiff was not advised that because it was a test case he was unlikely to be liable for any costs.

(a) that there be judgment for the defendant on the plaintiff's claim for compensation begun in the Magistrates Court by Originating Claim dated 19 December 2012; and

(b) that the plaintiff pay the defendant's costs.

I certify that the preceding thirty-eight [38] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice Penfold.

Strano v Australian Capital Territory

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Judgment (65 paragraphs)

Strano v Australian Capital Territory (No 2) [2016] ACTSC 206 (5 August 2016)

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