FEDERAL COURT OF AUSTRALIA

Sluggett v Human Rights & Equal Opportunity Commission [2002] FCA 1060

COSTS - no special rule in proceedings for judicial review of Human Rights and Equal Opportunity Commissioner’s decision in discrimination proceedings that unsuccessful applicant is not to bear the successful respondent’s costs

Disability Discrimination Act 1992 (Cth), s 23

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

Federal Magistrates Act 1999 (Cth), s 79

Human Rights and Equal Opportunity Commission Act 1986 (Cth), s 46PO

Native Title Act 1993 (Cth), s 85A

Workplace Relations Act 1996 (Cth), s 347

Ruddock v Vadarlis (2001) 188 ALR 143 discussed

Tadawan v State of South Australia [2001] FMCA 25 referred to

Oshlack v Richmond River Council (1998) 193 CLR 72 discussed

Physical Disability Council of New South Wales v Sydney City Council [1999] FCA 815 referred to

CHANDRAKANTHI SLUGGETT  v  HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION and FLINDERS UNIVERSITY OF SOUTH AUSTRALIA

S 92 OF 2000

DRUMMOND J

26 AUGUST 2002

BRISBANE (VIA VIDEO LINK TO ADELAIDE)

THE COURT ORDERS THAT:

1.                  The applicant pay the second respondent’s costs of and incidental to the application, including reserved costs, fixed in the sum of $5,000.

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

REASONS FOR JUDGMENT

1                     On 9 August 2002, I ordered that Ms Sluggett’s application be dismissed.  At the request of the parties, I deferred consideration of the question of costs to enable submissions to be provided.  That has now been done.

2                     The applicant contends that the Court should make no order as to costs, despite the outcome of the proceeding, for the following reasons:

(1)               Discrimination matters are ordinarily no cost matters as evidenced by the practice of State tribunals and the fact that the Human Rights and Equal Opportunity Commission does not have power to order costs.  Reliance is placed on a decision of the Federal Magistrates Court, Tadawan v State of South Australia [2001] FMCA 25 at [62].

(2)               The Court is anxious not to discourage litigants from bringing claims which may well have merit because of the fear of an adverse order in the event that the applicant is unsuccessful.  Reliance is placed here on other decisions in the Federal Magistrates Court, including Phillips v Australian Girls’ Choir [2001] FMCA 109.

(3)               The nature and intent of anti-discrimination legislation would be thwarted if citizens were unreasonably inhibited from prosecuting bona fide claims, even if they are ultimately unsuccessful.  The applicant here relies on another Federal Magistrates Court decision, Ryan v Presbytery of Wide Bay Sunshine Coast [2001] FMCA 12.

(4)               Discrimination matters involve questions of public interest.  In support of this point, the applicant refers to the fact that she was funded by the Commonwealth Attorney-General’s Department in bringing the proceedings in this Court, having satisfied that department of, among other relevant criteria for the grant of such funding, that her case had the potential for a decision that would be of general application on questions of public interest, viz, the interpretation of legislation dealing with discrimination.

3                     The second respondent which alone contested the application submits that it should have its costs of the proceedings.  It relies on the following:

(1)               The applicant has failed on all grounds in this Court after having similarly failed in the proceedings before the Human Rights and Equal Opportunity Commission.

(2)               The second respondent has incurred substantial costs in this Court, said to be approximately $20,000 in external legal fees (and a much larger sum in external legal fees in defending the proceedings in the Commission), quite apart from a substantial further expenditure in internal expenses associated with the litigation in this Court as well as in the Commission.

(3)               There is no indication in the legislation conferring jurisdiction on this Court in human rights cases of a Parliamentary intention to limit the Court’s general jurisdiction under s 43 the Federal Court of Australia Act 1976 (Cth) with respect to costs.  This is to be contrasted with s 347 the Workplace Relations Act 1996 (Cth) and s 85A the Native Title Act 1993 (Cth), which limit this Court’s general power to order costs in proceedings brought before it in cases under those two statutes to cases in which a party has behaved unreasonably.

(4)               As to point (2) relied on by the applicant, the second respondent submits that the Federal Magistrates Court decisions each involve refusals by the court to order costs against an applicant in a discrimination case unsuccessful in an interlocutory hearing and have no relevance where costs are sought by a respondent who has successfully defeated an action.

(5)               As to point (4) relied on by the applicant, the second respondent submits that the applicant, at no stage, gave any indication to it that the proceedings had any public interest element and pursued the proceeding as inter partes litigation in order to obtain monetary and other relief from the second respondent.

(6)               The second respondent also relies upon an open offer contained in its solicitor’s letter of 10 May 2001 to settle the matter on terms that dealt with her complaint about having been given “fail” grades in 1993 and which also included the term that the applicant discontinue her action on the basis that each party pay its own costs of the action, an offer expressed to “remain open until withdrawn by us in writing”.  By this letter, the second respondent’s solicitors said:

“Your client has at all times been able to return to the University and complete her degree, however she has chosen not to do so.  Indeed our client by letter dated 10 April 1995 offered to waive the ‘show cause’ requirement to ensure she could continue her degree.  This offer was restated on 12 March 1997 to Denys Simpson who was then a member of your firm.  Both offers were refused.  Her choice not to complete her degree cannot be visited on the University.

…

Our client is prepared, as it has always been, to allow your client to complete her studies on the basis set out in the recent letter from Peter Blanksby of the University to your client, dated 5 March 2001.

In the circumstances, our client is prepared to settle this matter on the following basis:

•           that your client enter into a mutually acceptable release agreement

•           that your client discontinue her action on the basis that each party pay their own costs of the action

…

As you know, our recent discussions with your counsel as to the basis on which settlement discussions might proceed have involved a settlement involving no monetary payment.  Our client regards your client’s attempt now to increase her damages claim to up to $300,000 as unrealistic and opportunistic and our client sees little point in negotiating with your client in person unless she is willing to deal on a more reasonable basis.

The above offer will remain open until withdrawn by us in writing, and will be relied upon on any application by our client for costs in accordance with the decision in Calderbank v Calderbank.”

Surprisingly, in view of the applicant’s submission on costs, though the second respondent says in its written submissions on costs dated 23 August 2002 that this offer has not been withdrawn, it has never been accepted.

4                     Though the second respondent submits that it should have its costs against the applicant, it is prepared to accept a lump sum award of costs pursuant to O 62 r 4(2)(a) the Federal Court Rules fixed in an amount of $5,000.  That appears to be very much less than the amount it could expect to obtain if it were to be awarded its costs taxed on the usual party-and-party basis.

5                     As the second respondent correctly contends in point (3) of its submissions, Pt IIB the Human Rights and Equal Opportunity Commission Act 1986 (Cth), which confers jurisdiction on this Court to hear certain discrimination complaints that is additional to this Court’s general jurisdiction over Commonwealth administrative decisions under the Administrative Decisions (Judicial Review) Act 1977 (Cth), does not impose any restriction on this Court’s power to award costs in those complaint proceedings or in any other proceedings involving human rights issues brought in this Court under any other legislation.  This is to be contrasted with the position as to the costs power in proceedings under, eg, the Workplace Relations Act and the Native Title Act.  The general approach of this Court to the exercise of its power under s 43 the Federal Court of Australia Act to award costs was most recently stated by Black CJ and French J in Ruddock v Vadarlis (2001) 188 ALR 143, where their Honours said:

“[9]    …  The power of the court so conferred is not fettered by any stated legislative presumption about the manner of its exercise.  That is consistent with the longstanding authority of the House of Lords in Donald Campbell & Co Ltd v Pollack [1927] AC 732 that ‘the Court has an absolute and unfettered discretion to award or not to award [costs]’ …  Like all discretions however, it must be exercised judicially and not against the successful party except for some reason connected with the case.

…

[11]     Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that:

·                    Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.

…”

6                     The Magistrates Court’s power to award costs under s 79 the Federal Magistrates Act 1999 (Cth) is conferred in terms similar to those in s 43 the Federal Court of Australia Act.  But it appears from the cases relied on by the applicant, and from the cases cited in those decisions, that, in proceedings coming before the Federal Magistrates Court by application under s 46PO the Human Rights and Equal Opportunity Commission Act for a full hearing by the court of the applicant’s complaint of discrimination, the Federal Magistrates Court has taken a different view from this Court about how its costs discretion should be exercised.  In Tadawan v State of South Australia [2001] FMCA 25, Raphael FM refused to award costs against an applicant whose claim of victimisation contrary to the Racial Discrimination Act 1975 (Cth) was dismissed after a full hearing on the merits, saying, at [62]:

“The [Federal Magistrates] Court has accepted that these matters were normally considered to be ‘no costs’ matters, as evidenced by the practice of state tribunals and the fact that there was no power in HREOC to award costs. The Court has recognised that where proceedings are brought a successful party should not have the benefit of his or her victory lost in costs. The Court is also anxious not to discourage litigants from bringing claims which may well have merit because of the fear of an adverse costs order in the event that the applicant is unsuccessful. On the other hand, the Court can use its powers in relation to costs to discourage unmeritorious claims.”

7                     It is unnecessary to decide whether the application by the Federal Magistrates Court of such a policy in human rights cases in exercising its statutory discretion as to costs is consistent with the statutory power.  The proceeding in this Court is for judicial review under the Administrative Decisions (Judicial Review) Act of a decision by the Commission on the applicant’s complaint, a decision given, moreover, after an exhaustive hearing on the merits.  Even if it were appropriate to adopt the approach of the Federal Magistrates Court with respect to costs in hearings on the merits in human rights cases brought to the Court under s 46PO the Human Rights and Equal Opportunity Commission Act, I do not think that applications to this Court under the Administrative Decisions (Judicial Review) Act for review of decisions by the Commission should be regarded as a class of case calling for a special rule as to costs.

8                     The Full Court of this Court considered the discretionary power to award costs in the context of what was said to be public interest litigation in Ruddock v Vadarlis.  Of the decision of the High Court in Oshlack v Richmond River Council (1998) 193 CLR 72, Black CJ and French J said there, at [21]:

“But the general conclusion of the [High] court is consistent with the observation of Kirby J made a few weeks later in South West Forest Defence Foundation v Department of Conservation and Land Management (No 2) (1998) 154 ALR 411 at 412 that nothing in Oshlack requires that every time an individual or body brings proceedings asserting a defence of the public interest and protection of the environment, a new costs regime is to apply exempting that individual or body from the conventional rule.”

9                     In Physical Disability Council of New South Wales v Sydney City Council [1999] FCA 815, a disability discrimination case in which the Disability Council sought an injunction to restrain the Sydney City Council from demolishing a pedestrian bridge much used by wheelchair-bound people, Madgwick J took the view that Oshlack, at [7]:

“… proposed that the traditional rule that costs follow the event should continue to apply.  However, if proceedings can properly be characterised as public interest litigation, the prime motivation of which is the upholding of the public interest in the rule of law, that may be a factor which contributes to a finding that there are special circumstances justifying a departure from the traditional rule.”

10                  This holding is consistent with what the majority said in Ruddock v Vadarlis.

11                  In what the majority in Ruddock v Vadarlis described as “a most unusual case … quite different in character from the predominantly environmental litigation in which many of the previous decisions concerning the impact of public interest considerations on costs awards have been made”, their Honours refused to order the unsuccessful respondent to an appeal to pay the successful party’s costs of the appeal or that party’s costs of the proceedings at first instance where it had initially failed.  The majority set out at [28] and [29] the considerations that led them to their view.

12                  However, it is difficult to characterise the litigation in this Court as public interest litigation:  the claim the applicant made unsuccessfully to the Commission was for a declaration that the second respondent had discriminated against her contrary to s 23 the Disability Discrimination Act 1992 (Cth), an order that her academic record be amended to delete the failed grades which she was given in 1993 and orders compensating her for economic loss and for pain and suffering, including hurt feelings and humiliation.  Though by her amended application, the applicant sought only an order setting aside the Commission’s determination, in the originating application which the applicant herself prepared and filed in this Court, she sought, in addition to an order setting aside the Commission’s decision, “a declaration that [she] be permitted to complete the academic requirements taking into consideration the degree and nature of the disability, the cost of studies, etc”.  The material before me on the costs argument indicates that, by May 2001, she was claiming damages from the second respondent of up to $300,000.  The litigation was brought in this Court by the applicant to resurrect the case before the Commissioner in which she sought to procure monetary and other relief for herself.  That the vehicle for this claim was proceedings for judicial review of a decision of the Commission given under the Disability Discrimination Act does not, in my opinion, warrant the proceedings in this Court being described as having a public interest element.  Even if they could be so described, I would not consider such a feature of the case, brought for the primary purpose of obtaining monetary and other relief by the applicant, as sufficient to justify denying the respondent University its costs of the proceedings.  I am strengthened in that view by the open offer of settlement made in May 2001, as well as by the fact that the second respondent has been wholly successful in the litigation.

13                  I can see no reason why I should not follow the ordinary practice of this Court and order that the applicant pay the second respondent’s costs.  The second respondent has sought a lump sum award of costs pursuant to O 62 r 4(2)(a) in an amount which I consider to be very significantly less than the costs the second respondent will obtain after a party-and-party taxation.  Since there is no prospect that the applicant will obtain, on a quite expensive taxation, a lower assessment of the costs liability I think she must bear, I will order that the applicant pay the second respondent those costs fixed in the sum of $5,000.

14                  The applicant also seeks an order that the time for filing and serving the notice of appeal against my order dismissing her application be extended and fixed at twenty-one days from the making of the order in relation to costs.  The applicant has not put before me any evidentiary basis for such an order, nor has she made any submissions explaining why she should have such an extension of time.  The second respondent opposes the extension sought.  I can see no justification for extending time.  I dismissed the application on 9 August last by formal order in respect of which an appeal could have been immediately instituted.   The applicant lodged submissions on costs only on 20 August because her counsel sought an extended time to put in those submissions.  Immediately they were received, my associate, at my direction, informed counsel that I was not prepared to give the extension of time sought in the absence of agreement between the parties and that, if there was no agreement, it would be necessary for the applicant to make an application for an extension of time in accordance with the Federal Court Rules.  No such application has been made.  I will not extend time to appeal.

Associate:

Dated:              27 August 2002