FEDERAL COURT OF AUSTRALIA

Merit Protection Commissioner v Nonnenmacher [1999] FCA 274

Practice and procedure – late joinder of a respondent to proceedings – obligation of an applicant to identify and join appropriate respondents – discussion of meaning of “contradictor”.

Costs – whether respondent should bear costs for late joinder of a party – whether order for costs was interlocutory or final – whether an application for leave to appeal was necessary.

Administrative Decisions (Judicial Review) Act 1977 (Cth) – s 11, s 12.

Federal Court Rules – O 4, O 6 r 8, O 62 r 14.

Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421 – cons.

Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 – cons.

News Ltd v Australian Rugby Football League Ltd (1996) 139 ALR 193 – cons.

Pegang Mining Co Ltd v Choong Sam (1969) 2 MLJ 52 – cons.

R v Australian Broadcasting Tribunal;  Ex Parte:  Hardiman (1980) 144 CLR 13 – appl.

Hall v Nominal Defendant (1966) 117 CLR 423 – cited

Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 – cited

Australian Securities Commission v Somerville (1994) 51 FCR 38 – cited

Jarrett, Elliott and Camm v Seymour (1993) 46 FCR 557 – cited

MERIT PROTECTION COMMISSIONER, ANNA LE THANH, ARTHUR NORRIS AND THE SECRETARY OF THE DEPARTMENT OF DEFENCE v GARRY JAMES NONNENMACHER

N 104 OF 1999

JUDGES:       BEAUMONT, LEE & DOWSETT JJ.

DATE:            23 MARCH 1999      

PLACE:          SYDNEY

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1.                  Leave to appeal granted.

2.                  Appeal allowed.

3.                  Set aside the order that the appellants pay the respondent’s costs of the proceedings on 17 December 1998.  In lieu thereof, order that those costs be the appellants’ costs in the proceedings at first instance.

4.                  Liberty to apply for costs of the appeal reserved.  Any application for such costs to be made by written submission filed and served within 28 days.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

THE COURT:

1                     The appellants seek leave to appeal from an order for costs made by a Judge of the Court. The arguments on the application for leave, and upon the appeal if leave were granted, were heard together.  Accordingly the applicants for leave have been described as appellants.   The relevantcircumstances are as follows:

2                     By a decision of the fourth appellant, the respondent was selected for promotion pursuant to the provisions of s 50 of the Public Service Act 1992 (“the Act”).  Karen Hay, who was also a candidate for the position, appealed from this decision, pursuant to s 50B of the Act.  The first appellant accordingly convened a Promotion Appeal Committee, constituted by the second and third appellants and Ronald Scollaro.  That committee, by a majority, decided that the decision of the fourth appellant should be set aside and that, instead, Karen Hay should be promoted.

3                     The respondent instituted proceedings in this Court against the Promotion Appeal Committee and its members, and the fourth appellant, seeking judicial review of the Committee’s decision pursuant to the Administrative Decisions (Judicial Review) Act 1977 (the “ADJR Act”).  Ms Hay was not made a party to the proceedings.  Subsequently, the Promotion Appeal Committee was replaced by the first appellant.

4                     The matter came before the learned primary Judge for directions on several occasions when the possibility of the joinder of Ms Hay was discussed.  However, no order for her joinder was then made.  At a directions hearing on 17 September 1998, her Honour fixed the matter for final hearing on 17 December 1998.

5                     At the commencement of the hearing on 17 December 1998, Mr Howe, counsel for the appellants, again raised the question whether Ms Hay ought to be joined.  The transcript records the following:

“MR HOWE:   Could I just raise one final matter, and its going to reflect support from what fell from your Honour?  Pursuant to order 6 rule 8, your Honour can join necessary parties at the court’s own motion.

HER HONOUR:          I’m aware of that, Mr Howe, I have actually read the orders of the Federal Court.  Just highly undesirable that that be done, and if it’s being done at this late stage well, of course, today has gone and you are happy to pay the costs of today, are you?  Would you like to take some instructions on that?

MR HOWE:     Yes, your Honour I will.  I would anticipate that my instructions would be to resist an order for costs---

HER HONOUR:          Resist paying the costs of today?

MR HOWE:     Yes, your Honour.

HER HONOUR:          On what basis?

MR HOWE:     On the basis that it is for the applicant to join necessary parties.  If the effect of your Honour’s decision is that the applicant hasn’t done so, the costs burden of that should fall to the applicant, more particularly in a case where the jurisdictional flaw is drawn to the applicant’s attention.

HER HONOUR:          Well, if it is a case of me deciding to join Ms Hay as a party and I haven’t been given  notice of anything that is in the letter or in the resistance to such joining, or more the nature of what you were proposing to say today then, well, the consequence of adjournment is a consequence of a decision I might make to join Ms Hay.

MR HOWE:     Which, in turn, is a consequence of the proceedings not having been properly constituted by the applicant, and if the court is forced of its own motion to properly constitute the proceedings against the submissions of the applicant---

HER HONOUR:          I don’t feel forced at all.  I’m merely trying to facilitate proper applications to this court.  I might not even agree with you that Ms Hay is to be joined.

MR HOWE:     Yes, I understand.

HER HONOUR:          The next step, the joy of whoever gets the benefit of the tick in any proceedings before me, will then be agitated on the history of this matter before the Full Court, and we are talking about people being promoted in a government department from ASO3 to 4.  This is not the constitutional case of the century and they are ordinary people being pushed into, without resources of the Commonwealth, being pushed into litigation.  I wouldn’t regard it as a responsible act as a Judge of this court to take a technical point, the result of which would be that my opinion, and I might say at the moment it is against you, would be capable of appeal.

The practical way to fix that, as far as I can see, is for me to join Ms Hay, which doesn’t embarrass Mr Kerr in having to deal with that matter nor cut across the principle that you are putting but that would have been done some time ago if I had been – it could have been done by means of directions not by this process.  Mr Nonnenmacher has been put to an enormous amount of expense today and the other consequences flow, and the Commonwealth can pay for it.

MR HOWE:     Well, we wish to be heard in relation to costs depending on what order your Honour makes, and I can’t say any more than that.”

6                     Her Honour then ordered the joinder of Ms Hay.  No question arises here as to that joinder.  But her Honour further ordered that the appellants pay the respondent’s costs of the proceedings on 17 December 1998 and the appellants now seek leave to appeal from this order.

7                     The appellants wish to challenge the order as to costs on two bases, namely:

(1)               That it was based upon her Honour’s incorrect attribution to the appellants of responsibility for the late joinder of Ms Hay;

(2)        That her Honour failed to hear the appellants on the question of costs before making the order in question.

8                     As to the latter complaint, the above extract makes it clear that her Honour indicated in advance that she considered that “the Commonwealth” should pay the costs.  This expression appears to have included all of the present appellants.  At an earlier stage in the proceedings the issue of costs had been raised, and counsel for the appellants had indicated his opposition to any order for costs against them.  He was asked to explain the basis for his resistance and said:

“On the basis that it is for the applicant to join necessary parties.  If the effect of your Honour’s decision is that the applicant hasn’t done so, the costs burden of that should fall to the applicant, more particularly in a case where the jurisdictional flaw is drawn to the applicant’s attention.”

9                     Although counsel subsequently indicated a desire to be heard further on the issue of costs, it seems unlikely that there was anything further to be said.  He had already accurately and succinctly summarized his position.  Given that he had reserved his right to make further submissions, it would have been better if her Honour had given him a further opportunity to do so.  However her Honour’s indication of an intention to make a particular order as to costs did not pre-empt the possibility that she could make some other order.  It remained open to counsel to remind the primary Judge of his desire to make further submissions.  His failure to do so might well have been taken as indicating his acceptance of the fact that the foreshadowed order would be made and that there was nothing more to be said.  In any event, because of our view as to the substantive merits of the present application, it is not necessary that we consider this matter further.

10                  The appellants’ real complaint is that the order was based upon the premiss that they ought to have taken steps to join Ms Hay at an earlier stage, thus avoiding the costs thrown away as a result of her being joined on the day fixed for the hearing.  The appellants assert that the respondent was at least equally responsible for this failure in view of his not having joined Ms Hay at the outset and having consistently refused to do so thereafter.  The difficulties which this caused were discussed on numerous occasions, but no step was taken to remedy the position until the appellants again drew attention at the hearing to the need to join Ms Hay.  The parties were particularly concerned by the absence of what is described at various places in the transcript as a “contradictor”.  By this, her Honour and counsel appear to have meant a party who would oppose the respondent’s application for judicial review with respect to the merits of that application.  Those merits were not as to the relative qualifications of the respondent and Ms Hay, but rather as to various criticisms of the procedure followed by the Promotion Appeal Committee, which criticisms were the basis of the respondent’s application. 

11                  The use of the term “contradictor” appears to have confused the issue to some extent.  As we understand it, the notion of a contradictor comes from a line of decisions concerned with the appropriateness of declaratory relief.  See, for example, Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421 at 437 - 438 per Gibbs J (as his Honour then was), where his Honour approved the following passage from Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448:

“The question must be a real and not a theoretical question;  the person raising it must have a real interest to raise it;  he must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought.”

12                  This rule was designed to ensure that merely theoretical questions or requests for advisory opinions were not brought to the court under the guise of applications for declarations.  The intention was to ensure that any issue brought for adjudication would relate to a genuine dispute.  The term “contradictor” describes the person with whom the applicant for relief is in dispute.  That person must be joined in the proceedings as a party thereto, but it is not necessary that he or she attend to resist the application.  If he or she does not do so, a binding order may still be made.  The requirement for a “contradictor” is not designed to secure actual opposition.  In our view the difficulties correctly identified by her Honour in these proceeding were attributable, not to the absence of any party willing to take an opposite view in court, but to the non-joinder of Ms Hay.  She was a necessary party. 

13                  The ADJR Act says nothing concerning the identification of parties to applications thereunder.  Section 11 prescribes that an application be made in accordance with the Rules of Court.  Order 4 provides for the commencement of proceedings by application in Form 5.  That form, together with Form 1 (providing for headings), seems to contemplate the naming of appropriate respondents in the application.  Order 6 r 8 contemplates that necessary parties will be joined at the outset, otherwise there would be no point in making provision for the subsequent joinder of a person who “ought to have been joined”.  This approach is reflected in the judgment of the Full Court in News Ltd v Australian Rugby Football League Ltd (1996) 139 ALR 193 at 299, where the Court said:

“Absent an application for joinder by a defendant, or by a third party who claims to be directly affected by the proposed orders, it is for the party prosecuting the proceedings to choose who are the necessary parties to enable the court to make the orders sought.  Generally speaking, to permit that party to transfer to others who might be affected by the outcome of the proceedings the responsibility of deciding whether or not they should apply to be joined could be productive of uncertainty and inconvenience.  At times, it could lead to the need to halt expensive litigation part way through, because a third party insufficiently understood the proceedings, or, through impecuniosity or some other reason, was not adequately advised.”

14                  As to who is a necessary party the Court, at 298, endorsed the opinion of Lord Diplock in Pegang Mining Co Ltd v Choong Sam (1969) 2 MLJ 52 at 55 - 56 as follows:

“While their Lordships agree that the mere fact that a person is likely to be better off financially if a case is decided one way rather than another is not a sufficient ground to entitle him to be added as a party, they do not find the dichotomy between “legal” and “commercial” interests helpful.  A better way of expressing the test is:  will his rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?”

15                  The respondent asserts an entitlement to have the decision of the Promotion Appeal Committee set aside.  If the respondent succeeds, Ms Hay would lose the benefit of a decision in her favour.  In those circumstances, she was always a necessary party to these proceedings and should have been joined at the outset.  It was not sufficient merely to serve her, giving her the opportunity to apply to be joined pursuant to s 12 of the ADJR Act.  We do not understand that section to be designed to relieve an applicant of the obligation to identify appropriate respondents.

16                  One other matter calls for comment, although it is not strictly relevant to our decision.  It appeared from argument before us and below that the parties were confused as to the proper roles to be played by the various appellants in these proceedings.  Pursuant to the decision of the High Court in R v Australian Broadcasting Tribunal;  Ex Parte:  Hardiman (1980) 144 CLR 13 at 35:

“If a tribunal becomes a protagonist in this court there is the risk that by so doing it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted.  The presentation of a case in this court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the tribunal.”

17                  The first, second andthird appellants were, in effect, the “tribunal” for present purposes.  Pursuant to the decision in Hardiman (supra), their participation in these proceedings should be limited to the areas outlined by the High Court in that case.  However, Hardiman does not apply to the fourth appellant.  It is reasonable to assume that in some circumstances, an employer may wish to make submissions as to the appropriate outcome of proceedings concerning promotion of its employees.  On the other hand, at least with respect to relatively junior positions, the employer may choose, in the interests of good industrial relations, not to favour one employee as against another.  Either course is quite appropriate.

18                  The respondent, by faint submission, suggested that the order for costs was not interlocutory but a final order and that an application for leave to appeal was unnecessary.  The respondent referred to O 62 r 14 of the Federal Court Rules in support of that submission. Order 62 r 14 reads as follows:

“All costs to which a party is entitled under any interlocutory order made in a proceeding shall be included in the final order then signed or entered unless the costs have already been paid.”

19                  Her Honour did not order that the costs be taxed and paid by the appellants.  In the absence of any further order such costs were not payable until the matter was determined.  Until that time the order may have been varied.

20                  Clearly, the order for costs was interlocutory in form. (See: Hall v Nominal Defendant (1966) 117 CLR 423.)

21                  Usually leave to appeal from an interlocutory order will be granted only where sufficient doubt attends the decision from which the right to appeal is sought and substantial injustice would be caused to the applicant if the decision were wrong and leave were refused.  (See:  Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398 – 399; Australian Securities Commission v Somerville (1994) 51 FCR 38 at 44 – 45; Jarrett, Elliott and Camm v Seymour (1993) 46 FCR 557 at 559.)

22                  Even more rare will be a grant of leave to appeal against an order for costs.

23                  In the circumstances, we are of the view that there should be leave to appeal.  The interests of justice dictate as much.  As far as we can see, the appellants did nothing more than draw to the attention of the Court, and of the respondent, a serious flaw in the constitution of the proceedings.  Although it was suggested that the position adopted by the appellants at the hearing on 17 December 1998 was in some way different from their position on previous occasions, we cannot see any real distinction between their position on that date and the views expressed by her Honour and the parties on earlier occasions.  The real difficulty at all times was the respondent’s reluctance to join Ms Hay.  This appears to have been based upon a desire to avoid exposing her to costs, but that is the inevitable consequence of allowing judicial review of decisions of this kind.  It would be an extreme injustice if parties such as the appellants were to be punished in costs for having drawn the Court’s attention to procedural difficulties.  In addition, the proposed appeal involves an important question of procedure.  Her Honour’s order was based upon an assumption that the respondent did not bear the primary responsibility for identifying necessary respondents to his application.  This proposition is inconsistent with the decision of the Full Court in News Ltd (supra).

24                  Having granted leave to appeal, the appeal must, for the reasons given, succeed, and the order that the appellants pay the respondent’s costs of the proceedings on 17 December 1998 must be set aside accordingly.  The respondent refused, or failed, to have Ms Hay joined as a proper party to the proceeding he had commenced and by that conduct the day set aside for the hearing of the proceeding was wasted when an order was made by the Court that Ms Hay be joined.  Accordingly, the respondent should not have the costs of that day and the appropriate order should be that the costs be costs in the cause of the appellants and it will be so ordered.

Associate:

Dated:              23 March 1999