Wodrow v Commonwealth of Australia

The consequences of delay 5 The core fact on which the applicant relies is the extended period of time that elapsed before the bill of costs was filed. However one calculates it the delay has been considerable; seven years and nine months from the date of the costs order or six years and eight months from the High Court's refusal to grant special leave. The applicant relies alternately on the following submissions: 1. the mere fact of the delay is, in itself, sufficient to ground the relief sought; 2. The delay was such that the limitation period applicable to the costs order has expired; 3. the delay entitles the applicant to relief under O 62 r 17 and r 22; 4. the delay coupled with the behaviour of the Commonwealth's servants and agents operated to his prejudice by inducing in him the reasonable belief that the Commonwealth would not seek to enforce its cost order; and/or 5. the delay is inconsistent with the Commonwealth's 'model litigant' status and it should not be allowed to depart from this position. I shall address these submissions in the order in which they are set out above.

Mere delay in enforcing the costs order 6 It is as well to state forthwith that, in my opinion, delay in enforcing the costs order without any other complicating or exacerbating factor is not a ground for the relief the applicant seeks. This is not to say that there is no public interest in the expeditious prosecution of claims and that delay may not compromise justice. It is for that reason that the legislature sets limitation periods beyond which, generally, actions cannot be brought. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551-3, McHugh J remarked that a legislative policy of fixing definite time limits for prosecuting civil claims had existed for almost 400 years. His Honour discussed the rationale for limitation periods and, among others, noted two bases for the policy that are relevant here, namely that a long delay may be 'oppressive, even "cruel" to a defendant' and that 'people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them'. His Honour continued, at 553: 'A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgement that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated.' 7 The enactment of a statutory limitation period is both a legislative statement that an action to enforce a right should not be brought after the expiration of the relevant period and a recognition that it may be brought before that point in time. Both of these propositions may be subject to exceptions arising from the conduct of one or other of the parties or by statute. In the absence of some ground of exception however, mere delay in seeking to enforce a right does not raise a barrier to its enforcement within the limitation period. The legislature has expressed its will that in such circumstances an action may be commenced within the limitation period and it is not for the courts to deny that expression of will. Mere delay in enforcing a right may raise a hope that it will not be enforced but it cannot raise a reasonable expectation or amount to a representation that the right will not be enforced.

The limitation period 8 Under the Limitation Act 1985 (ACT) ('Limitation Act') a general limitation period of six years applies unless another limitation period is provided by the Act; s 11. Section 14(1) provides as follows: 'An action on a cause of action on a judgment is not maintainable if brought after the end of a limitation period of 12 years running from the date on which the judgment first becomes enforceable by the plaintiff of by a person through whom he or she claims.' 9 The costs order, enforcement of which the applicant now opposes, was made on 7 September 1993. Order 35 r 3 of the Federal Court Rules provides that, subject to any contrary direction by the Court, a judgment or order takes effect 'on the date on which it is pronounced or made'. Assuming that there is no contrary direction, the earliest date on which the limitation period applicable to the Full Court's costs order would expire is 6 September 2005. Clearly that point in time has not been reached. Nevertheless, counsel for the applicant submitted that a judgment for costs is not enforceable until the costs have been taxed. Prior to taxation, it is submitted, a costs order creates only an entitlement to have the quantum of costs determined and the limitation period applicable to that entitlement is the six year period provided for in s 11 of the Limitation Act not the twelve year period provided under s 14. If a certificate of taxation is obtained within six years of the costs order, action must be taken to recover the costs within twelve years of the costs order. As the respondent made its application for taxation more than six years after the costs order was made the applicant invites the conclusion that the limitation period has expired and the respondent is now barred from enforcing the costs order. 10 The applicant's submission is as ingenious as it is novel. In support counsel for the applicant referred to the decision of Master Allen in TA Field Pty Ltd v Frigmobile of Australia Pty Ltd [1978] 2 NSWLR 488. The matter before the learned Master concerned an order for 'costs to be assessed or taxed' and the point in time from which interest on those costs was payable. In the context of s 95 of the Supreme Court Rules 1970 (NSW) it was held that a costs order 'takes effect' only when the costs are taxed and that interest ran only from that date. I do not quarrel with that conclusion which, with respect, must be correct. In my view however the case has no relevance to the matter under consideration here (to which s 14 of the Limitation Act applies) and I cannot accept the applicant's submission. 11 In the absence of agreement between the parties, taxation of costs is a necessary preliminary to the payment of costs. Without a certificate of taxation the party liable to pay the costs cannot know the quantum of the liability. This does not mean that the costs order is not enforceable until the quantum is determined but rather that the first step in enforcing the order is to proceed to taxation. The respondent suggested other examples of the rights and obligations that can flow from a costs order in addition to the entitlement to present a bill of costs such as the right to lodge a proof of debt for such costs with a trustee in bankruptcy. It is not necessary to consider further the authorities on which the respondent relied or other examples given. The only cause of action that could found the respondent's claim is the costs order made pursuant to a judgment of the Full Court and therefore the twelve year period allowed under s 14 of the Limitation Act applies. In my opinion an order of costs is 'enforceable' within the meaning of s 14 and accordingly the relevant limitation period is twelve years from the date on which the costs order was made, namely 7 September 1993. For these reasons I conclude that, having brought enforcement proceedings within twelve years from 7 September 1993, the respondent is not barred from seeking to enforce the costs order by the expiration of the relevant period under the Limitation Act.

Relief under O 62 r 17 and r 22 12 Another issue that can be dealt with briefly is the applicant's claim for relief under O 62 r 17 or O 62 r 22, the terms of which are as follows: '17 Where a party entitled to costs refuses or neglects to bring in his costs for taxation or to procure them to be taxed, the taxing officer may, so as to prevent another party being prejudiced by the refusal or neglect - (a) certify the costs of the other party and the refusal or neglect; or (b) allow a nominal or other sum to the party refusing or neglecting to bring in his costs. 22 (1) In the case of a fee or allowance which is discretionary it shall, unless otherwise provided, be allowed at the discretion of the taxing officer. (2) The taxing officer in the exercise of his discretion shall take into consideration - (a) the other fees and allowances to the solicitor and counsel, if any, in respect of the work to which such a fee or allowance applies; (b) the nature and importance of the proceeding; (c) the amount involved; (d) the principle involved; (e) the interest of the parties; (f) the fund, estate or person to bear the costs; (g) the general conduct and cost of the proceeding; and (h) all other relevant circumstances.' 13 Neither of those provisions applies in the present circumstances. Order 62 r 17 applies only where no bill of costs has been brought in for taxation. It does not apply once this has occurred. The rule is directed to resolving the uncertainty engendered when a party who has the benefit of a costs order neglects to file a bill of costs. In that situation the party liable to pay costs may be prejudiced by not knowing whether the other party intends to pursue its right. Once the bill of costs is filed there is no such uncertainty and in those circumstances the rule has no further purpose. The applicant does not dispute that the respondent filed a bill of costs for taxation on 15 June 2001 and for this reason O 62 r 17 is not applicable. 14 I have difficulty in seeing any basis on which O 62 r 22 could apply in this case. This rule is concerned with the content of the bill of costs and, specifically, it is directed to a taxing officer's exercise of discretion in considering a claim for a discretionary fee or allowance. It is one of several rules under O 62 (rules 19, 20, 21 and 22) that govern the manner in which the taxation officer deals with costs claimed and the criteria to be applied in determining whether a discretionary amount is to be allowed. Counsel for the applicant suggested that the Court, if satisfied of a valid reason for doing so, could direct the taxing officer that, taking into account all of those matters to be considered under sub-rule 22(2), the costs allowed should be limited to one dollar. I am not convinced that this is a proper direction for the Court to make but, even if it is, the 'valid reason' to which counsel referred would need to be established. Order 62 r 22 provides a mechanism whereby a taxing officer may exercise discretion in relation to the quantum of costs including, inter alia, counsels' fees, expert witnesses' fees, costs prematurely incurred and copying of documents. The rule allows the taxing officer to exercise discretion as to the appropriateness of costs incurred having regard to the circumstances of the proceeding. It is not, in my view, within the scope of O 62 r 22 for a taxing officer to wield discretionary power to render completely ineffective a valid costs order pursuant to judgment in the absence of specific evidence as to why the cost of each item or group of items being taxed is said to be inappropriate in the circumstances of a particular case. The rule is not a tool for sidestepping the need to establish grounds for relief in the usual way and in any event I do not, in the circumstances of this case, consider that the exercise of discretion in the manner suggested by the applicant is appropriate.

Delay occasioning prejudice to the applicant 15 The applicant submitted that, even if the respondent's claim is not barred by mere effluxion of time, the delay coupled with the behaviour of the respondent and respondent's agents or associates is such as to occasion severe prejudice to the applicant if he is now required to pay the respondent's costs. As previously mentioned, although initially claiming that the respondent was estopped from enforcing the costs order, in the course of argument, counsel for the applicant conceded that he could not make out estoppel and instead relied on the Court's jurisdiction to prevent abuse of its own processes. 16 The Court has power to order a stay of proceeding where there has been a delay that is intentional and contumelious or which give rise to serious prejudice to an innocent party either under O 37 r 10 of the Federal Court Rules or in exercise of its power to control its own processes. In this respect the applicant relied on the decision of French J in Busby v Australian Telecommunications Commission [1992] FCA 78 ('Busby'). His Honour found that a delay of four years in bringing a bill of costs for taxation created, in the circumstances before him, sufficient prejudice to warrant a stay on a costs order under O 37 r 10. His Honour rejected the possibility of relief under O 62 r 17 because, as here, no motion in relation to the delay had been brought before the costs order had been brought in. In relation to the claim for a stay under O 37 r 10, his Honour noted that the delay must be intentional and contumelious or give rise to serious prejudice to the innocent party and at 6 observed: 'It is right to say that the burden of showing prejudice justifying a stay rests upon Mr Busby. And one can speculate that the delay in payment of the costs has done little more than benefit him. On the other hand, honest people often arrange their affairs as best they can in order to deal with their liabilities and it is reasonable to assume that Mr Busby would have arranged his affairs to deal as best he could with the impact of these costs had they been pursued with anything like reasonable vigour. The length of the delay and the marginal nature of his finances, lead me to conclude that if required to pay now he would suffer prejudice which is not to be dismissed by simply saying the he has not had to pay the money earlier. I do not know how or whether he could have done anything to meet or compromise the costs ordered had they been pursued earlier, but he has been deprived of any such opportunity and has undoubtedly operated in the last few years on the assumption that these costs would not be pursued. Apart from the lost opportunity, the psychological stress on an individual of marginal means associated with the late revival of interests in this costs order is not to be discounted. Non-compensable inconvenience and stress on individuals are significant elements of modern litigation … While it may be that, measured by reference to external criteria, the prejudice to the applicant is minor it nevertheless is, in my opinion, serious having regard to his own circumstances. On the other hand the damage to the respondent's interests arising from a stay on the costs order is minor having regard to the amount in issue.' 17 The respondent argued that Busby was wrongly decided however it is not necessary for me to express an opinion on that point. Whether or not the ultimate decision was correct in my opinion his Honour was clearly correct in the importance he attached, where the issue is one of the Court exercising its discretion, to giving careful consideration to the individual circumstances in assessing the merits of an application such as that presently before me. It is therefore necessary to consider the actions of the parties in the period of over six and a half years between the High Court's refusal of leave to appeal on 12 October 1994 to 15 June 2001 when the respondent filed its bill of costs. 18 The following facts are not in contention. In the period from 12 October 1994 to the present the respondent took a number of steps relevant to the enforcement to its rights under the costs order. These included attempting to ascertain the applicant's true financial position and whether, in view of various changes in the applicant's financial position, it would be cost effective to pursue the matter further. In particular the respondent tried to reach agreement with the applicant concerning the payment of costs. These efforts were described in considerable detail in the respondent's notice to admit facts that was served on the applicant on 5 March 2002. The applicant did not dispute any of these matters and therefore, pursuant to O 18 r 2 of the Federal Court Rules, is deemed to have admitted them. In any event, in the applicant's statement of facts, issues and contentions it was stated that the applicant did not dispute the evidence. There was however, considerable dispute about other evidence including representations alleged to have been made to the applicant.

Alleged representations that the respondent would not enforce the costs order 19 The applicant gave evidence of a number of matters in which he had been involved in negotiations between the Commonwealth Government and other persons. The purpose of this evidence was to support a claim that the respondent was estopped from enforcing the costs order because of representations on which the applicant had relied to his detriment, to the effect that the respondent would not pursue its costs. It was submitted that there was a pattern of interaction between the applicant and the respondent, a feature of which was that he assisted the Commonwealth and other persons in sensitive negotiations and that, in appreciation of such assistance, senior Commonwealth personnel represented to him or allowed him to believe that the Commonwealth would not pursue its costs. One such matter involved the family of an Australian citizen, David Wilson, who was taken hostage in Cambodia and subsequently executed by his captors. Another related to negotiations with Mr Paul Barratt, a former head of the Department of Defence. This matter is discussed in detail below.

Representations alleged to have been made by Mr A Sinodinos 20 The applicant also gave evidence that in 1999 he assisted the Commonwealth Government by acting as an intermediary between it and Mr Paul Barratt who had been dismissed from his position as Secretary of the Department of Defence. Mr Arthur Sinodinos, the Prime Minister's Chief of Staff, was also involved in these negotiations. The applicant did not seek to be paid for these services (although he now reserves his right to do so) but understood that in appreciation of his efforts the matter of his liability for costs would not be pursued. He referred to a telephone discussion on or about 8 September 1999 with Mr Sinodinos and alleged that Mr Sinodinos said, in relation to the costs, 'Forget about it, the matter has been taken care of'. The applicant said that when the costs were again raised by the respondent in July 2000 he again telephoned Mr Sinodinos who promised to look into the matter. He stated that in a subsequent conversation with Mr Sinodinos in Parliament House he was again reassured about the costs. 21 The account given by Mr Sinodinos is significantly different. He confirmed that the applicant had offered to assist in the matter of Mr Barratt but said that at no time was he engaged formally or informally by the Commonwealth. He denied that he had ever advised the applicant that the costs would be written off by the Commonwealth. Mr Sinodinos stated that 'any decision to write off such costs would need to be made by the Secretary of the Department of Finance and Administration'. He said that he was not aware of any such decision having been made and added, 'I did not regard myself as having the authority to make such a statement and had no reason to believe that such costs would be written off.' It appears that Mr Wodrow was aware that Mr Sinodinos did not have the authority to write off costs. In a facsimile to Mr Sinodinos dated 2 September 1999, the applicant referred to the statement made by the Australian Government Solicitor that it was likely that the costs would be written off under s 47 of the Finance and Administration Act 1997 (Cth) and stated: 'It is now 2 September 1999 and I have still not received any letter. In the absence of a Secretary for Defence, who makes the executive recommendation, the approval to write off the debt, will require the authorisation of the Secretary of the Department of Finance, Dr Peter Boxall.' 22 He then asked if Mr Sinodinos would 'nudge the matter along' so that he could receive official confirmation that the costs had been written off. While it is possible that Mr Wodrow hoped that Mr Sinodinos would exert some influence in his favour, his evidence indicates that he understood that Mr Sinodinos had no authority to personally deal with the matter. 23 Annexed to Mr Sinodinos' affidavit was a copy of email exchanges he had with Ms Susan Sheppard of the Department of Prime Minister and Cabinet in July 2000 in which he attempted to obtain further information about the matter. The fact of those exchanges is consistent with his denial that he ever represented (either before or after July 2000) that the Commonwealth would not seek to enforce its costs order. I accept the account given by Mr Sinodinos which is considerably more convincing than that of the applicant.

Alleged comments of Mr R Williams QC 24 Another person whose comments were said to have raised an expectation that the respondent would not pursue its costs is Mr R Williams QC who appeared for the respondent in the High Court special leave application on 12 October 1994. After the application for leave to appeal was dismissed Mr Williams successfully sought an order for costs. According to the applicant, Mr Williams had then said to him words to the following effect, 'They will not be chasing you for costs. Get on with your life and try to put it behind you.' This evidence was challenged under cross examination but the applicant remained adamant that his evidence was correct. Mr Williams evidence was that he had no recollection of any such conversation which would have been contrary to his practice of refraining from conversation with unrepresented litigants wherever possible. He confirmed that at all stages of the proceedings his instructions were to seek orders for costs against the applicant and not to compromise or negotiate on the issue of costs. 25 In my opinion it is unlikely that a senior practitioner such as Mr Williams would have made a statement such as is alleged. I find it more likely than not that Mr Williams did not make the comment that the applicant attributes to him. I am confirmed in this view by the applicant's failure to mention the alleged representation in his letter to Senator Newman in 1997 (see [28] to [32] below) or to raise it with the Senator following the comment of the Honourable Bronwyn Bishop in her letter of response that no such indication had ever been given by the Commonwealth. 26 Assuming however that the applicant's version of events is correct I do not think it would advance his case. At most the comment could only be taken to refer to the costs of the High Court leave application, not to the costs in dispute here. Moreover I do not think that any reasonable person would have placed much reliance on such a comment which would seem to be more of an attempt to cheer up the applicant rather than a representation as to the future conduct of the client. This interpretation is supported by the recollection of Ms Godtschalk who had been Mr Williams' junior in the High Court. 27 The applicant supported his version of the conversation with Mr Williams in his affidavit of 5 September 2001 in which he referred to a conversation he had with Ms Godtschalk in the Italo Australian Club on Monday 13 August 2001 in which Ms Godtschalk confirmed his version of events. This evidence was admitted over the strenuous objections of the respondent. The respondent was then given leave to file an affidavit by Ms Godtschalk giving her version of the event. Ms Godtschalk remembered that the applicant had been visibly distressed at the High Court's decision and that he and Mr Williams had a conversation at the bar table. She thought that Mr Williams was trying to settle the applicant down and, as far as she recalled had said to him, 'Settle down. They probably won't chase your for costs.' Ms Godtschalk said she did not recall any comments about the applicant's assets. In my view the applicant did not seriously understand Mr Williams to be making any representation on behalf of the respondent. If the applicant had taken Mr Williams seriously one would expect him to have explored the matter a little more, either immediately or soon after.

Correspondence between Ministers Newman and Bishop 28 The applicant tendered copies of correspondence in 1997 between Senator Jocelyn Newman, then Minister for Social Security and the Honourable Bronwyn Bishop then Minister for Defence Industry, Science and Personnel. By letter dated 28 May 1997 Senator Newman wrote to Minister Bishop seeking an explanation of the manner in which the costs issue had been handled and setting out eight questions that the Minister was requested to answer. In her response dated 11 June 1997, Minister Bishop stated that the Commonwealth 'has six years from the date of judgement to seek enforcement'. She explained that the Commonwealth wanted to assess the applicant's financial position before incurring the expense of quantifying its costs. She stated that at no time had the Commonwealth ever indicated to the applicant that it would not seek to enforce the costs order. She added that the Commonwealth did not have sufficient information at that time to make a decision on the appropriate action to be taken in respect of the costs and that, accordingly: 'I am not able to give an undertaking that no further action will be taken against Mr Wodrow in respect of the debts owed by him to the Commonwealth'. 29 On 25 June 1997, Senator Newman again wrote to Minister Bishop taking issue with some aspects of the Minister's response of 11 June. In particular that letter complained of the delay and the confrontational manner in which the costs issue had been pursued. Significantly, the letter does not refer to the applicant having any understanding that the Commonwealth would waive its right to recover costs. There is no record before the Court of any response to this letter. 30 On cross-examination the applicant admitted that he had written to Senator Newman on 12 May 1997 concerning his concerns about possible enforcement of the costs order. Presumably it was that letter that prompted Senator Newman's initial letter to Minister Bishop, which the applicant admitted had been based on information that he provided to Senator Newman. On cross-examination the applicant agreed that the letter he wrote to Senator Newman did not mention any representation made by Mr Williams following the proceedings in the High Court. 31 The applicant also admitted that he had been shown Minister Bishop's response of 11 June 1997. He did not take issue with the Minister's statement that she could give no undertaking that costs would not be pursued but maintained that it was his belief that the Commonwealth would not pursue its costs apparently in reliance on his understanding of reassurances from Mr Sinodinos. 32 The applicant also alleged that Minister Bishop's statement that the Commonwealth had six years to enforce its costs order (see [28] above) was a representation (on which he relied) that the Commonwealth would not seek to do so beyond that period. I cannot accept this. Irrespective of any error that Minister Bishop made in referring to the applicable limitation period, in the context of a letter that unequivocally stated that no assurance as to non-enforcement had been or could be given, I do not believe that even the most optimistic of litigants could find a positive representation of non-enforcement in the Minister's letter. The applicant's failure to mention the alleged representation of Mr Williams in connection with this correspondence confirms my view that his aim in enlisting Senator Newman's assistance was to dissuade the respondent from the course on which it seemed bent, namely the enforcement of the costs order.

Bad faith and abuse of process 33 The applicant attempted to show that the respondent's decision to file its bill of costs for taxation was made in bad faith and was an abuse of process. The applicant alleged that his involvement in what might be called the David Wilson matter and certain other matters was not favourably viewed by the Commonwealth. In making this submission the applicant referred to certain 'coincidences in timing' meaning that on a number of occasions when he was overseas the respondent took steps in relation to the costs order including sending him requests for information about his financial situation while he was out of the country. In my opinion there was no evidence to support these allegations and I reject them entirely. 34 The applicant also alleged that the respondent had acted in abuse of the Court's taxation and enforcement procedures in pursuing its costs because the respondent was aware that the applicant was to receive a large payment of legal fees from it in another matter relating to a Mr Alastair Gaisford. It was not in dispute that the respondent acted to enforce its costs only after it became aware that there was some possibility of the applicant having some capacity to pay. The respondent says that this was reasonable and responsible behaviour. I agree with this submission. With hindsight it may be that the respondent could have made its position more clear to the applicant but I do not express a concluded opinion on that and, in any event, it is entirely without legal significance. 35 The applicant also alleged that a review of his superannuation invalidity pension in 2000 was initiated in an attempt to harass him. This was denied by the case manager Ms Penny O'Neill who explained that all pensions on the ComSuper database are subject to periodic review. The applicant's pension had been reviewed annually from 1987 to 1992. Ms O'Neill attributed the failure to review it since that time to changes in staff and procedures and to giving higher priority to other tasks. She said that the letter sent to the applicant in July 2000 was entirely standard and sent on her own initiative as part of a standard review process. She was not shaken in any way on cross-examination and I accept her account. I do not accept that there was any hidden agenda prompting the review. 36 As previously mentioned the applicant conceded that he could not establish an estoppel but sought to invoke the Court's discretion which, it was submitted, should be exercised in his favour where the conduct of the respondent has engendered an expectation that it will not exercise its legal rights. As well as relying on the conduct that, in the applicant's submission, engendered certain expectations, the applicant referred to evidence of his poor health and his history of stress related illness. Counsel also referred to the fact that, after the applicant's career as an engineer had come to an end, he had attempted to rehabilitate himself by qualifying as a barrister and setting up his own practice. He made much of the effect of the uncertainty that resulted from the respondent's delay. 37 I am not impressed by that argument. If the respondent's delay in presenting its bill of costs was like the sword of Damocles hanging over his head then it was always in his power to invoke the remedy provided by O 62 r 17. It would seem to me that such a situation is exactly why that rule was provided. A person with the burden of a costs order has the means of bringing the matter to a head. My impression is that, far from wanting to do that, the applicant hoped that the Commonwealth would not pursue him for its costs. Those hopes were strengthened by the generally good relations he had with members of the public service and the legislature. I have the impression that during the Commonwealth's period of perceived inactivity he imagined not just that the Commonwealth had overlooked the matter but that it had decided not to pursue him. However hope may flourish irrationally. I have already explained why I do not accept that it was reasonable for the applicant to form the view that the respondent did not intend to pursue costs or that a senior public servant had promised to deal with the matter for him.

The Commonwealth as a model litigant 38 The applicant also raised the issue of the Commonwealth's status as a model litigant. The Attorney-General has issued Legal Services Directions ('Directions') under s 55ZF of the Judiciary Act 1903 (Cth) to apply to the performance of Commonwealth legal services and the conduct of litigation by Commonwealth agencies. Appendix B to the Directions, with effect from 1 September 1999, describes the model litigant obligation: '2. The obligation requires that the Commonwealth and its agencies act honestly and fairly in handling claims and litigation brought by or against the Commonwealth or an agency by:

(a) dealing with claims promptly and not causing unnecessary delay in the handling of claims and litigation,

(b) paying legitimate claims without litigation, including making partial settlements of claims or interim payments, where it is clear that liability is at least as much as the amount to be paid,

(c) acting consistently in the handling of claims and litigation,

(d) endeavouring to avoid litigation, wherever possible,

(e) where it is not possible to avoid litigation, keeping the costs of litigation to a minimum, including by:

(i) not requiring the other party to prove a matter which the Commonwealth or the agency knows to be true, and

(ii) not contesting liability if the Commonwealth or the agency knows that the dispute is really about quantum,

(f) not taking advantage of a claimant who lacks the resources to litigate a legitimate claim,

(g) not relying on technical defences unless the Commonwealth's or the agency's interests would be prejudiced by the failure to comply with a particular requirement,

(h) not undertaking and pursuing appeals unless the Commonwealth or the agency believes that it has reasonable prospects for success or the appeal is otherwise justified in the public interest, and

(i) apologising where the Commonwealth or the agency is aware that it or its lawyers have acted wrongfully or improperly.' 39 The notes to the above include the following: '5. The obligation does not prevent the Commonwealth from enforcing costs orders or seeking to recover its costs.' 40 In its Legal Briefing No. 48 issued on 15 July 1999 the Australian Government Solicitor defined its model litigant policy as follows: 'Model Litigant Policy The Commonwealth, through its instructing officers and lawyers, is required to act as a model litigant. Basically, this means that the Commonwealth must act fairly, but is not precluded from acting firmly. For example: · acting consistently · not taking purely technical points when no prejudice has been suffered · avoiding undue delay · making part payments where appropriate · not requiring the other party to prove facts which the Commonwealth knows to be true · nevertheless, properly testing claims against it · not caving in to spurious demands · generally pursuing costs awarded in the Commonwealth's favour.

The requirement to act fairly is not met simply by complying with applicable professional conduct requirements (eg. Bar Association rules or Law Society rules).' (emphasis added) 41 The comments of the Full Court in Scott v Handley [1999] FCA 404 at pars [43] to [46] are apposite: '[44] The spirit of this 'model litigant' responsibility… is perhaps best captured in the observations of Griffith CJ in Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 at 342: 'I am sometimes inclined to think that in some parts - not all - of the Commonwealth, the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary, is either not known or thought out of date. I should be glad to think that I am mistaken.' [45] Insistence upon that standard is a recurrent theme in judicial decisions in this country in relation to the conduct of litigation by all three tiers of government: see eg Yong v Minister for Immigration and Multicultural Affairs (1997) 75 FCR 155 at 166; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 196-197; SCI Operations Pty Ltd v Commonwealth of Australia (1996) 69 FCR 346 at 368; Director of Public Prosecutions (Cth) v Saxon (1990) 28 NSWLR 263 at 267; Kenny v State of South Australia (1987) 46 SASR 268 at 273; Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 at 558-559; P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 at 383-384; see also R v Tower Hamlets London Borough Council, Ex parte Chetnik Developments Ltd [1988] 1 AC 858 at 876-877. [46] As with most broad generalisations, the burden of this fair dealing standard is best appreciated in its particular exemplifications in individual cases. The courts have, for example, spoken positively of a public body's obligation of 'conscientious compliance with the procedures designed to minimise cost and delay': Kenny's case, above, at 273; and of assisting 'the court to arrive at the proper and just result': P & C Cantarella Pty Ltd v Egg Marketing Board, above, at 383. And they have spoken negatively, of not taking purely technical points of practice and procedure: Yong's case, above, at 166; of not unfairly impairing the other party's capacity to defend itself: Saxon's case, above, at 268; and of not taking advantage of its own default: SCI Operations Pty Ltd, above, at 368.' 42 The Commonwealth's role as a model litigant influences the way in which the Commonwealth conducts litigation, it does not impinge the Commonwealth's ability to enforce its substantive rights. I see nothing in the judicial discussion of the concept of the Commonwealth as a model litigant which is contrary to note five in Appendix B to the Legal Service Directions referred to above. Indeed, in seems to me that, as evidenced by the Australian Government Solicitor's Legal Briefing No. 48, the Commonwealth considers that it is part of its role as a model litigant to generally pursue costs awards in its favour. 43 Although the Commonwealth, through its delay, may have fallen short of its own standards in pursuing the costs order made in 1993, this does not lead to the conclusion that it should be precluded from enforcing the order. I do not think the applicant's case is assisted by the model litigant policy. 44 For reasons set out above I have concluded that the applicant's notice of motion should be dismissed. In the normal course of events the respondent would be entitled to costs of the motion. In its statement of facts issues and contentions however, the respondent submitted that: '…regardless of the outcome of these proceedings, in light of the history of this matter, it is appropriate that no order as to costs be made in relation to these proceedings - both as a matter of fairness to both parties and in an endeavour to bring some finality to the long running disputes between the applicant and the respondent.'

The orders of the court will therefore be that the notice of motion is dismissed that there be no order as to costs. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone.

Solicitor for the Respondent: Australian Government Solicitor

Date of Hearing: 5 June 2002 to 7 June 2002