FEDERAL COURT OF AUSTRALIA

Librizzi v Flower Power Pty Ltd [2000] FCA 1500

COSTS – relevance of a grant of legal aid to the unsuccessful party – whether the conduct of the parties before the Human Rights and Equal Opportunity Commission is a proper circumstance to consider on the issue of costs 

HUMAN RIGHTS – costs on judicial review of a decision of the Commission

Administrative Decisions (Judicial Review) Act 1977 (Cth)

Federal Court of Australia Act 1976 (Cth), s 43

Sex Discrimination Act 1984 (Cth), s 81

Legal Aid Commission Act 1979 (NSW), s 47

Re Sanchez Ex parte Smits & Anor (1994) 49 FCR 326

Woodlands v Permanent Trustee Company Ltd (1996) 139 ALR 127

Thomas Fischer v Commonwealth of Australia [1997] FCA 1029 (25 September 1997)

Legal Aid Commission of New South Wales, Policy Bulletin No. 3/99

DENISE LIBRIZZI v FLOWER POWER PTY LTD

N 307 of 1999

EINFELD J

25 OCTOBER 2000

SYDNEY

THE COURT ORDERS THAT:

1.      there be no order as to costs

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

REASONS FOR JUDGMENT

1                     On 20 July 2000 I published my reasons for judgment in these proceedings (the judgment) dismissing the applicant’s application for judicial review of a decision of the Human Rights and Equal Opportunity Commission (the Commission) made on 16 March 1999.  The primary issue dealt with in the judgment was whether the Commission had made a reviewable error of law – as that phrase is understood in the context of the Administrative Decisions (Judicial Review) Act 1977 (Cth) – in deciding that whilst the applicant had been discriminated against on the basis of her pregnancy in contravention of the Sex Discrimination Act 1984 (Cth) (the Act), such discrimination did not amount to her having been constructively dismissed from the respondent’s employ.  The sufficiency of the Commission’s award of $2000 by way of damages was also in issue.  My determination of these issues was reached on the documentary evidence and written submissions, including the transcript of the proceedings before the Commission, without an additional oral hearing.  As no submission asked for costs, I made no order. 

2                     Some three weeks after the judgment, the respondent’s solicitor advised my Associate of his intention to apply for an order for costs.  He has subsequently done so in writing, seeking an order that the applicant pay his client’s costs as agreed or assessed, and the applicant has responded.

the submissions of the parties on the issue of costs

3                     The respondent made two submissions in support of its application for costs.  The first was that the applicant, as the unsuccessful party in the proceedings, should in the ordinary course be ordered to pay the respondent’s costs.  The respondent said secondly that the fact that the applicant is in receipt of a grant of legal aid should in no way affect the awarding of costs.  It submitted that the Legal Aid Commission would meet the burden of any costs order because the order would not surpass $15,000, which it said and indeed the Commission’s Policy Bulletin No. 3/99 provides, is the statutory cap for which that Commission is liable.

4                     The applicant submitted that there should be no order as to costs.  She said firstly that any costs order against her would result in her victory in the Commission being not merely pyrrhic but punitive.  She described her victory in the Commission as pyrrhic because despite its finding that she had been unlawfully discriminated against and its award of $2000, her legal costs in prosecuting those proceedings were considerable and, by reason of the Act, not in substance recoverable against the respondent.  That the applicant was required to meet the cost of the engagement of counsel for a five day hearing before the Commission, as well as the purchase of the transcript for the amount of $3,364, supports this submission.  She also stated that her copy of the transcript was in due course also made available to the respondent.   The applicant’s description of the punitive effect of an adverse costs order here refers to the fact that despite a finding of unlawful discrimination by the Commission which was not contested in this Court, this litigation could well result in a financial loss for the applicant.  She effectively argued that the Court would and should not allow the beneficial and remedial purposes of the Act to be undermined by the imposition of a net financial loss on a person who has been subjected to the very discrimination the Act seeks to expose.  Having regard to the limited powers of the Commission under section 81 of the Act, the applicant contended that such a punitive result would undermine the purpose and objectives of that Act.

5                     The applicant also stated that these proceedings raised for debate the important legal principle of constructive dismissal, and that its identification and limits were such a significant public interest that costs should not be awarded.  She said that she was always of the bona fide belief that she had been constructively dismissed.

6                     The applicant thirdly said that the parties’ conduct throughout the course of the litigation, including before the Commission, should be taken into account on the issue of costs.  Particular reference was made to the Commission’s finding that the respondent’s principal witness, Michael Spiteri, had not been truthful in his evidence.  It was said that such untruthfulness in effect lengthened the proceedings before the Commission by exposing the applicant and the other witnesses to lines of questioning they otherwise would not have had to endure.

7                     On the legal aid question, the applicant agreed that her grant of legal aid is not relevant to the issue of costs, albeit on different grounds than the respondent, but argued that the fact that costs were not applied for when judgment was handed down is relevant to the issue: Thomas Fischer v Commonwealth of Australia [1997] FCA 1029 (Branson J, 25 September 1997).  As it seems to me, this decision is distinguishable from the present case.

8                     The respondent disputed the “public interest” argument on the basis that if accepted it would, in cases to review possible errors of law by the Commission, convert the Court into a ‘no costs’ jurisdiction, and thereby presumably contradict or put an unauthorised and unacceptable gloss on the purpose and effect of section 43 of the Federal Court of Australia Act 1976 (Cth).  It contended that the real motivation for the application for judicial review was that the applicant was aggrieved by the $2000 awarded for damages and that her application was merely an attempt to increase the award.  As this aim failed, an order for costs should flow.

9                     The respondent also said that the Court ought not have regard to the proceedings before the Commission, the conduct of the parties in those proceedings nor the likely costs to each party as a result of those proceedings because its only jurisdiction was to review Commission’s reasons for its decision.  In any event the respondent disputed some of the applicant’s assertions of fact including who was responsible for the length of the proceedings, her state of mind at relevant times and the origins of the transcript availability.  There is no basis for my attempting to resolve these factual issues even if relevant to the present question.

costs in this court

10                  Section 43 of the Federal Court of Australia Act 1976 (Cth) provides:

                        ……

(1)              The Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs shall not be awarded.

(1A)     ……

(2)              Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.

11                  I have said in various decisions: eg Re Sanchez; Ex parte Smits & Anor (1994) 49 FCR 326, that this section does not provide a “usual rule” or “normal order” but that the issue of costs is within the unfettered discretion of the Court to be exercised judicially in light of all the circumstances of the particular case.  In other words, successful parties are only entitled to, or for that matter to be refused, an order for costs if the relevant circumstances of the case warrant the making, or refusal, of such an order.

the circumstances of this case

12                  As appears to me, the most significant circumstances of this case are:

(i)                  that the result of the proceedings before the Commission were essentially a finding in her favour of unlawful discrimination and a resultant award of $2000 for the damage she sustained as a product of that discrimination;

(ii)                that the proceedings in this Court were conducted with the consent of the parties solely on the documentary material submitted by them and forwarded by the Commission, with the aid of their written submissions but without the expense and delay of oral evidence or argument; and

(iii)               that the Commission was not found to have made any judicially reviewable error of law.

irrelevant considerations

13                  In my view, neither the conduct of the parties in the proceedings before the Commission nor the likely costs incurred by each party in those proceedings is relevant to the awarding of costs in the proceedings now before this Court.  The clear legislative intention is that the parties bear their own costs in mounting or defending proceedings in the Commission, and it would be quite improper for me to ignore or circumvent that intention by treating the proceedings in this Court on the very same issue in any different way.  Otherwise an unfortunate precedent might be created whereby parties before the Commission would be encouraged to appeal simply in the hope of having their costs in the proceedings before the Commission met, at least in part, by a costs order in this Court.

14                  Moreover, I am bound by the decision of a Full Court of this Court (Wilcox, Burchett and Olney JJ) in Woodlands v Permanent Trustee Company Ltd (1996) 139 ALR 127, whose reasoning I might respectfully add I find entirely convincing, to find that the applicant’s grant of legal aid is irrelevant to the issue of costs.  It is not correct, as the respondent submitted, that the Legal Aid Commission is required to pay all adverse costs orders made against its grantees: s 47 of the Legal Aid Commission Act 1979 (NSW).  In this case it would be bound to do so but if it were a relevant consideration, this consequence may well add a separate question of public interest to the applicable considerations.

15                  Whilst a proper consideration on the costs issue generally, the three week delay from the date of judgment to the date on which the respondent’s solicitor indicated his intention to apply for costs, also did not add anything of relevance to the application as neither the Court nor the applicant was inconvenienced or prejudiced by the delay.

conclusion

16                  It is my opinion that the circumstances of this case dictate a conclusion that there be no order as to costs.  Although I did not find particularly compelling the applicant’s contentions on the merits of her application for judicial review, with the result that these proceedings have ended her litigation precisely as it was after the Commission’s decision, it cannot be doubted that she had a sufficiently arguable case to justify the taking of her complaint further.   

17                  Moreover, a costs order against the applicant in this case would undermine the purposes and objectives of the Act in that it would result in the imposition of a heavy financial burden on her despite the fact that she has successfully established unlawful discrimination. 

18                  That the applicant made it possible for the parties to conduct the proceedings in this Court without the need for an oral hearing by making available her copy of the transcript is also a matter weighing in support of her argument on costs.  Without such assistance someone else would have had to carry the quite significant burden of obtaining a copy, with the likely result of considerably greater cost to the respondent.

Associate:

Dated:              25 October 2000