Tropoulos v Journey Lawyers Pty Ltd

Consideration 5 Relevantly, s 46PO(1) of the AHRC Act provides: (1) If: (a) a complaint has been terminated by the President under section 46PE, paragraph 46PF(1)(b) or section 46PH; and (b) the President has given a notice to any person under subsection 46PH(2) in relation to the termination; any person who was an affected person in relation to the complaint may make an application to the Federal Court or the Federal Circuit Court, alleging unlawful discrimination by one or more of the respondents to the terminated complaint. (Emphasis added) 6 For the purposes of s 46PO of the AHRC Act, it is clear that the second respondent in the current proceedings, Mr Galvin, was never "one or more of the respondents to the terminated complaint" of Mr Tropoulos. It follows that Mr Tropoulos' claim in this Court pursuant to the AHRC Act alleging unlawful discrimination against Mr Galvin is not competent, and should be dismissed. 7 Although the point was not conceded by the applicant, no argument of substance has been mounted by the applicant against this outcome. The point primarily in contention between the parties is the nature of a costs order against the applicant following the dismissal of his claim against Mr Galvin. Mr Galvin seeks an order that his costs of and incidental to the application be paid by the applicant on an indemnity basis, whereas Mr Tropoulos submits that any order for costs should be limited to a party-party basis. 8 In summary, Mr Watson for the applicant submitted that any costs order should be so limited because: At any time from March 2017 Mr Galvin could have sought an order that the Court strike out the claim against him as incompetent; Such an application would have been consistent with the overarching obligation of parties to the Court under ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act); and The incompetency of the claim against Mr Galvin was never pleaded by him in his defence or otherwise, and was allowed to "run on" by Mr Galvin until the trial. 9 Mr Morris QC for Mr Galvin submitted that an order for indemnity costs was warranted because: The lawyers for Mr Tropoulos were aware of the effect of s 46PO of the AHRC Act, and that it was incompetent to join Mr Galvin to the Federal Court proceedings; The first respondent had communicated with the lawyers for Mr Tropoulos in March 2017, placing them on notice that Mr Galvin had been improperly joined as a party to the Federal Court proceedings and had reserved his rights to costs; and It was not incumbent on Mr Galvin to incur the costs of an interlocutory strike-out application in circumstances where Mr Galvin had placed the applicant on notice as to the competency of the claim against him. 10 As a general principle it is well-established that costs should be awarded on a party-party basis unless the circumstances of the case justify a departure from the normal course: Colgate-Palmolive Company v Cussons Pty Ltd [1993] FCA 801; (1993) 46 FCR 225. As Kenny J recently observed in Morad v El-Ashey (No 2) [2017] FCA 1612 at [10]-[11], circumstances where an order for indemnity costs may be warranted include: where the applicant, properly advised, should have known that it had no chance of success; where an application is wholly untenable and misconceived; where there is evidence of particular misconduct on the part of a party which causes loss of time to the Court and to other parties; and where the Court takes the view that it is unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. 11 I consider that it is appropriate to order costs against the applicant referable to the dismissal of his claim against Mr Galvin on an indemnity basis for the following reasons. 12 First, I am satisfied that, properly advised, the applicant should have known that he had no chance of success against Mr Galvin in respect of this application. The language of s 46PO is plain and unambiguous. In circumstances where Mr Galvin was never a respondent to the terminated complaint in the Commission, he could not be the subject of an application to this Court alleging unlawful discrimination by him in terms of that complaint. 13 Second, and significantly, Mr Tropoulos is himself a lawyer, advised by lawyers with expertise in the area of discrimination law. He is not a litigant in person or a lay person without knowledge of this area of law. The claim against Mr Galvin in the application was clearly incompetent. Mr Tropoulos' lawyers should have known that there was no chance of success against Mr Galvin as a respondent to the application. Mr Tropoulos himself should have known this simply from reading the legislation. 14 Third, I reject the applicant's submission that Mr Galvin was required to instigate interlocutory proceedings against the applicant in discharge of Mr Galvin's obligations under ss 37M and 37N of the Federal Court Act, incurring costs associated with such an application. I so conclude particularly in light of evidence before me that Journey Lawyers had specifically brought to the attention of Mr Tropoulos' lawyers the question of the competency of the claim against Mr Galvin as early as March 2017, and the insistence by Mr Tropoulos' lawyers in email correspondence of 8 March 2017 that Mr Galvin was liable vicariously or accessorially. In relation to this issue I also note that Mr Galvin's lawyers communicated their disagreement that Mr Galvin was properly added as a respondent given the nature of the complaint, and that Mr Galvin reserved his rights. While it was no doubt open to Mr Galvin to specifically plead that the application against him was incompetent, the fault in this case in respect of the claim against Mr Galvin unequivocally lies with the applicant. 15 Finally, and in circumstances where no additional issues or evidence were raised by either the applicant or the respondent in the course of the primary proceedings referable to the claim against Mr Galvin, it is not inefficient to deal with the competency of the application against Mr Galvin at the conclusion of the applicant's case. To that extent, I reject the applicant's submission that Mr Galvin has been at fault for "allowing" the claim to continue to this point of the proceedings. 16 There is no evidence before me of the costs attributable to this aspect of the applicant's claim. However, given the untenable nature of the claim against Mr Galvin and the unreasonable conduct of the applicant in relation to that aspect of the claim, such costs should be awarded on an indemnity basis. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.