FEDERAL COURT OF AUSTRALIA

Carlos v Secretary, Department of Social Services (No 2) [2019] FCA 402

ORDERS

THE COURT ORDERS THAT:

1.    The applicant’s interlocutory application filed on 1 February 2019 is dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

CHARLESWORTH J:

1    By originating application dated 6 October 2017 the applicant, now named Mr Carlos, sought judicial review of a decision of the Administrative Appeals Tribunal. The Tribunal had affirmed a decision of the Secretary for Social Services to cancel Mr Carlos’s Disability Support Pension.

2    On 18 January 2019 I made an order dismissing the originating application and published written reasons for making that order: Carlos v Secretary, Department of Social Services [2019] FCA 21. Upon delivery of judgment I made a further order that Mr Carlos pay the respondent’s costs of the application, fixed in the sum of $15,182.12 (costs order). The respondent’s costs application was supported by an affidavit sworn by Ms Georgia Alice Wells on 18 January 2019 (Wells affidavit). By reference to that affidavit I was satisfied that an order for costs in a fixed sum should be made, and that the sum sought by the respondent was reasonable.

3    Mr Carlos is a self-represented litigant. He had not been provided with a copy of the Wells affidavit in advance of the hearing on 18 January 2019.

4    In the circumstances, I made a further order to the effect that Mr Carlos have liberty to apply to vary the amount specified in the costs order. On 1 February 2019, Mr Carlos filed an interlocutory application and supporting affidavit in the exercise or purported exercise of his liberty to apply.

5    I now determine Mr Carlos’s interlocutory application on the papers: Federal Court of Australia Act 1976 (Cth) (FCA Act), s 20A; Federal Court Rules 2011 (Cth), r 1.40 and r 36.41.

6    For the reasons that follow, the interlocutory application should be dismissed.

THE INTERLOCUTORY APPLICATION

7    The relief sought on the interlocutory application is expressed as follows:

No order of costs. The cost of the respondent to be awarded to the applicant.

8    On its face, the interlocutory application is not confined to the quantum of costs specified in the costs order. In effect, Mr Carlos seeks to have the costs order set aside and an award of costs made in his favour.

9    Mr Carlos filed a supporting affidavit comprising nine paragraphs.

10    Paragraphs [1], [2], [3] and [9] state background facts and restate the orders sought.

11    By [4] Mr Carlos asserts that the costs order, together with his outstanding legal and medical debts, will have the effect of forcing him into bankruptcy. No details of Mr Carlos’s financial position are provided, although it may be inferred that his income and assets are such that he qualifies for a disability support pension and that the costs order will have a significant financial impact on him.

12    Paragraph [5] contains a generalised criticism of the former Minister for Social Services but does not otherwise relate to the issue of costs.

13    By [6] Mr Carlos asserts that the amount of hours charged by the respondent’s legal representative were excessive, having regard to his status as a self-represented litigant. Mr Carlos does not point to any particular item of work specified in the Wells affidavit, nor does he propose an alternate amount.

14    By [7] Mr Carlos submits that the litigation involved a public interest element such that an award of costs should be made in his favour. That submission goes beyond the liberty extended to Mr Carlos to make submissions confined to the question of quantum and not to the question of whether costs should follow the event. I will nonetheless make some observations in respect of it.

15    By [8] Mr Carlos asserts that he is not a vexatious litigant. The order for costs is not founded on an assumption that the proceedings were vexatious. Rather, in exercising the discretion as to costs, I have determined that it is appropriate that the costs of the application follow the event.

CONSIDERATION

16    Section 43(3)(d) of the FCA Act confers a discretionary power to make an order for costs in a specified amount. An order for costs in a fixed sum may be preferred in order to avoid further delay and expense associated with formulating an assessment of costs and so meet the overarching purpose of the Court’s practice and procedure provisions: FCA Act, s 37M; Paciocco v Australia and New Zealand Banking Group Ltd (No 2) (2017) 253 FCR 403 at [16] – [17] (Allsop CJ, Besanko and Middleton JJ).

17    In Bitek Pty Ltd v IConnect Pty Ltd [2012] FCA 506; (2012) 290 ALR 288 Kenny J stated (at ALR [18]):

The starting point for the fixing of costs is the charges rendered by the applicant’s solicitors: Beach Petroleum at FCR 124; ALR 165 and Hamod v New South Wales [2011] NSWCA 375 at [820] per Beazley JA (with whom Giles and Whealy JJA agreed). The sum of costs fixed should also be proportionate to the nature, including the complexity, of the case: see Canvas Graphics Pty Ltd v Kodak (A'asia) Pty Ltd [1998] FCA 23. As Beazley JA said in Hamod, at [820], citing, among others, Beach Petroleum at FCR 123; ALR 164:

[820]    The approach taken to estimate the costs to be ordered must be logical, fair and reasonable … This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment … [Citations omitted.]

18    To similar effect, in Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 von Doussa J said (at 120):

An order that costs be assessed as a gross sum does not envisage that any process similar to that involved in taxation should take place, but the power must be exercised judicially and after giving the parties an adequate opportunity to make submissions on the matter (see at 76D; 265d).

See also Keen v Telstra Corporation Limited (No 2) [2006] FCA 930 at [5] (Rares J).

19    I have interpreted Mr Carlos’s affidavit as inviting the Court to scrutinise the Wells affidavit for evidence of overcharging or over servicing, and I have done so. I am satisfied that the expenses in fact incurred by the respondent are not excessive, having regard to the issues to be determined and the nature of the hearing. I am also satisfied that the amount of costs sought by the respondent incorporated an appropriate deduction to fairly reflect the outcome that might otherwise result on a more formal costs assessment. Mr Carlos has not, in any event, complained of the amount of the deduction per se. I am further satisfied that the matter was fit for counsel and that counsel’s fees are not excessive, again having regard to the nature of the proceedings.

20    I do not consider the status of Mr Carlos as a self-represented litigant to affect my assessment of the costs incurred by the respondent. The circumstance that the opponent of a litigant is self-represented may in some cases necessitate less work. In other cases, it may necessitate considerably more work, particularly where grounds for relief are ill defined and where a self-represented litigant relies on submissions or evidence that are difficult to relate to the grounds for relief. This case had those features.

21    Although Mr Carlos has not been granted liberty to apply to have the costs order revoked altogether, the order may be varied or revoked of the Court’s initiative or on the application of a party as it is interlocutory in nature: r 39.05(c).

22    I give some weight to the circumstance that Mr Carlos, as a self-represented litigant, sought to correct what he perceived to be an error of law affecting a decision to cancel a social security payment. There is, I accept, a public interest in recipients of social security benefits making appropriate challenges to the legality of administrative decisions or actions affecting payments that, although small in quantum, are statutory entitlements having great significance to the individual. Such litigation may be broadly in the public interest in the sense that there is an obvious benefit in the meaning of social security laws affecting multiple recipients being declared or clarified: Minister for Community Services and Health v Dibo Pty Ltd (1992) 38 FCR 292 at 294 (Burchett J, Hill and O’Connor JJ agreeing); Gray v Minister for Immigration, Local Government and Ethnic Affairs (1992) 38 FCR 351 at 355 (Burchett J). The spectre of an adverse costs order following from unsuccessful litigation is, I am prepared to accept, a potential inhibitor to litigation of this kind.

23    Notwithstanding that, I do not consider that the particular litigation commenced by Mr Carlos had a public interest element sufficient to persuade me that the costs order should be varied or revoked. The decision challenged by Mr Carlos turned upon his peculiar circumstances. He unsuccessfully sought merits review of the decision at three levels before commencing this proceeding. The particular error of law he sought to have determined also turned on matters peculiar to his own circumstances and did not concern the proper construction of a statute affecting multiple recipients. In critical respects, Mr Carlos’s proceeding was misconceived in that he sought to impugn the merits of the decision and so failed to demonstrate an error of law of a kind that must be alleged to attract the jurisdiction of this Court to interfere: Administrative Appeals Tribunal Act 1975 (Cth), s 44. I am satisfied that Mr Carlos was given adequate notice of the matters the respondent would raise in opposition to his originating application and particularly the importance of demonstrating an error of law, which ultimately he did not do.

24    Returning to the asserted consequences of the costs order on Mr Carlos, it may be accepted that enforcement of the order may have a significant financial impact upon him and so be perceived by him as a form of punishment. However, the order for costs serves a compensatory purpose, not a punitive one: Hacker v Weston (No 2) [2015] FCA 521 at [9] (Flick J); Latoudis v Casey (1990) 170 CLR 534 at 543 (Mason CJ); Ohn v Walton (1995) 36 NSWLR 77 at 79 (Gleeson CJ); De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 at [6] (Tamberlin, RD Nicholson and Emmett JJ).

25    In the circumstances of this case, it is appropriate that the respondent be compensated for its costs, notwithstanding the statutory context in which it was brought. The award of costs in a fixed sum will avoid the parties incurring further delay and expense. Accordingly, I will not vary or revoke the orders made on 18 January 2019.

26    The interlocutory application is dismissed.

Associate:

Dated:    21 March 2019