Ultimate Vision Inventions Pty Ltd v Innovation and Science Australia

1. The applicant pay the respondent's costs of the proceeding, including reserved costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WHEELAHAN J: 1 I gave judgment in this proceeding, which was an appeal from the Administrative Appeals Tribunal, on 24 May 2022: Ultimate Vision Inventions Pty Ltd v Innovation and Science Australia [2022] FCA 606. I ordered that the appeal be dismissed. The respondent sought costs of the proceeding, which the applicant opposed. In order to give the legal practitioners for the parties an opportunity to make submissions as to costs with the benefit of the court's reasons for judgment, I made orders that provided for the filing and service of written submissions relating to costs which, if filed, would result in costs being determined on the papers. 2 Both parties filed written submissions in accordance with the court's orders. The respondent maintained its application for costs of the proceeding, which the applicant opposed. 3 The applicant accepted that in the absence of special circumstances, costs would normally follow the event. For the reasons that follow, there are no special circumstances arising in relation to this proceeding, and accordingly costs, including reserved costs, should follow the event. 4 The applicant advanced eight features of the proceeding which it submitted amounted to special circumstances, the combination of which justified the court making no order as to costs. I will address each of those features in turn. 5 First, the applicant submitted that it had sought to settle the matter at an early stage and relied upon an open letter dated 24 September 2020 sent by the applicant's solicitors to the respondent's solicitors. The letter is no more than an invitation to the respondent to explore the possibility of resolution of all matters to which the applicant and the respondent were parties, and contained no offer. There was no submission by the applicant that explained how a high level invitation to resolve the matters in dispute between the applicant and the respondent could have any proper bearing on the costs of the appeal from the decision of the Administrative Appeals Tribunal in circumstances where the applicant has been wholly unsuccessful. I therefore place no weight on the first feature. 6 The second feature on which the applicant relied was that the applicant submitted that it was "compelled" to bring this proceeding, as it was the only avenue open to it to complete the development of its technology project, and to its commercial survival. I do not accept that the applicant was "compelled" to bring this proceeding. The applicant brought the proceeding to challenge findings by the Tribunal that it had not engaged relevant criteria in s 355-20 of the Income Tax Assessment Act 1997 (Cth) that may have entitled it to taxation rebates for the years ended 30 June 2014 and 30 June 2015. The burden on the applicant was to demonstrate some error relating to one of the questions of law that were raised on the appeal, which it failed to do. To the extent that the applicant claimed as part of its submission that it was "compelled" to bring the proceeding because it was "impoverished", I do not regard that as being material to the exercise of my discretion as to costs. In any event, there is insufficient evidence of the resources of the applicant, or otherwise the resources that might be available to it having regard to the financial position of its director and shareholder, Mr Werner Nicolau. 7 The third feature advanced on behalf of the applicant was that the applicant was "compelled" to bring the proceeding as a result of the conduct of the Administrative Appeals Tribunal. The applicant submitted that it was "obliged" to bring the appeal as a result of the unattributed copying of the respondent's submissions which I considered in detail in my reasons for judgment. I held that, although there had been substantial unattributed copying of the respondent's submissions to the Tribunal, it did not affect the legality of the Tribunal's determination. Although the legal consequences of the unattributed copying was a feature of the argument presented on appeal, and also a feature of the disposition of the appeal, I do not accept that the applicant was for that reason "compelled" to bring the appeal, and I do not place any weight on this claimed consideration. 8 The fourth and fifth features advanced on behalf of the applicant also relied upon the unattributed copying of the respondent's submissions to the Tribunal, but went further and claimed that "the respondent did not inform the applicant or the court of this copying". The applicant submitted that the respondent, particularly as a model litigant, had a duty to draw the copying to the attention of the court, citing the decision of the Full Court in Beaman v Bond [2017] FCAFC 142; 254 FCR 480 at [67] and [68]. There is nothing in this submission. The fact that the Tribunal had copied the respondent's submissions to it was well and truly before the court. It was raised by the applicant in its written submissions. The court invited the applicant to amend its notice of appeal to raise squarely the question of copying as supporting what became Question 6. The court made an interlocutory order at a case management hearing prior to the hearing of the appeal requiring the respondent to file and serve a copy of the Tribunal's reasons which highlighted in yellow those parts of the reasons which the respondent accepted were copied verbatim, or at least substantially, from its submissions to the Tribunal. At the hearing of the appeal, the question and relevance of copying was fully argued on behalf of the applicant and the respondent. There was no occasion for the respondent to do more, and these considerations therefore have no bearing on the question of costs of the proceeding. 9 The sixth feature raised on behalf of the applicant was that "there are public policy and precedential grounds to require official bodies and well represented State bodies to scrupulously meet their duties in litigation and decision making involving a disadvantaged private party, and to act both prudently and correctly". The applicant cited Lollis v Loulatzis (No 2) [2008] VSC 35, to support a submission that "disentitling conduct need not amount to a misconduct". In Lollis v Loulatzis, Kaye J at [28] cited a decision of the Full Court of the Supreme Court of Victoria in Keddy v Foxall [1955] VR 320 where at 324 the court (Lowe, Martin and O'Bryan JJ) stated - The cases do show, we think, that in exercising his discretion on costs a Judge may have regard to conduct - not necessarily misconduct - of any party which is calculated to occasion unnecessary expense … 10 The applicant's submissions appeared to suggest, but did not state explicitly, that the respondent had engaged in some type of disentitling conduct which should deprive it of the ordinary benefit of an order for costs. The applicant's submission was not developed, was devoid of any material content, and I reject it. For the avoidance of doubt, to my observation there was nothing about the respondent's conduct of this proceeding that would support a submission that it did other than act as a model litigant. The respondent provided appropriate assistance to the court and to the applicant, including by submitting to orders that it prepare some of the materials that were before the court such as parts of the appeal book that would usually have been the responsibility of the applicant. There was no sufficient basis for the applicant to advance an undeveloped submission that implied that there were grounds to criticise the respondent's conduct of the proceeding. 11 The seventh feature on which the applicant relied was that it was in the public interest that the question of the Tribunal's copying of the respondent's submissions be judicially considered. There is usually some degree of public interest in questions of law that fairly and genuinely arise out of a decision of an administrative decision maker. However, there is no feature of this case that makes the questions raised by the applicant of such public interest that there should not be the ordinary consequence that costs follow the event. 12 Finally, the applicant relied upon its claimed impecuniosity, in combination with the other matters the subject of its submissions, as a basis upon which the court should not order that it pay the costs of the proceeding. I place no weight on the applicant's financial position as a matter informing my discretion as to costs. It is not a reason, either alone, or in combination with the other circumstances on which the applicant relied, that persuades me that costs should not follow the event. And as I have already noted, there is insufficient evidence of the applicant's financial position, including the resources that are available to it. 13 For the foregoing reasons, none of the matters raised by the applicant, either alone or in combination with each other, justifies departure from the ordinary course that costs should follow the event. Accordingly, the order of the court will be that the applicant pay the respondent's costs of the proceeding, including reserved costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan.