FEDERAL COURT OF AUSTRALIA

Construction Forestry Mining & Energy Union v Queensland Coal and Oil Shale Mining Industry (Superannuation) Ltd [2003] FCA 1174

COSTS – Whether any costs order should be made – Unsuccessful application in relation to important and difficult legislation affecting many people – Position of successful respondents who were joined in the proceeding at their own request – Position of Commissioner of Taxation who was joined by the applicants in order to bind him to the decision in the proceeding.

Ruddock v Vadarlis (No 2) [2001] FCA 1865; 115 FCR 229 applied.

CONSTRUCTION FORESTRY MINING & ENERGY UNION & ORS v QUEENSLAND COAL AND OIL SHALE MINING INDUSTRY (SUPERANNUATION) LIMITED & ORS

N 745 of 2002

WILCOX J

24 OCTOBER 2003

SYDNEY

THE COURT ORDERS THAT:

1.         The applicants pay the costs of the third and fourth respondents, Mt Thorley Operations Pty Limited and Pacific Coal Pty Limited.

2.         There be no order in respect of the costs of any other party.

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

REASONS FOR JUDGMENT ON COSTS

WILCOX J:

1                     On 30 July 2003, I delivered reasons for judgment in this matter and made an order dismissing the proceeding.  I reserved the matter of costs, saying (in para 140):

‘Although the application fails, I do not think it necessarily follows that the applicants should be ordered to pay the costs of all the respondents.  Most respondents were joined at their own request and on the understanding that they might be left to bear their own costs in any event.  If any party seeks an order for costs, that party should make application by a written submission forwarded to my associate.’

The costs applications

2                     The following parties made applications for costs orders in their favour:

(i)                  the third and fourth respondents, being coal-mining companies joined in the proceeding by the applicants (‘the first category of respondents’);

(ii)                the 10^th to 38^th respondents (other than the 18^th, 25^th, 29^th, 34^th and 36^th respondents, who all withdrew from the proceeding before the hearing), being coal-mining companies who were joined as respondents at their own request (‘the second category of respondents’);

(iii)               the 39^th to 44^th respondents, also coal-mining companies joined at their own request (‘the third category of respondents’); and

(iv)              the 46^th respondent, the Commissioner of Taxation, who was joined as a respondent on the application of the applicants.

Each of these respondents, or groups of respondents, provided written submissions advancing their application.  The applicants in the principal proceeding (‘the applicants’) provided written submissions in reply.

Principles

3                     The applicants argue that no costs order should be made because ‘the proceedings constituted public interest litigation and/or were a test case concerning the superannuation obligations in the coal industry in New South Wales, and Queensland’.  Counsel refer to a number of cases in which judges have decided not to make a costs order in favour of a successful party on the basis that the case involved clarification of a particular enactment or was a ‘test case’.  The applicants also argue that, if any costs order is to be made, it should not extend to the second and third categories of respondents, because they were joined at their own request, nor should it extend to the Commissioner of Taxation, because of his statutory position in relation to the subject legislation.

4                     It is not necessary for me to discuss all the authorities cited by the applicants.  They were considered, and the relevant principles enunciated, by Black CJ and French J in Ruddock v Vadarlis (No 2) [2001] FCA 1865; 115 FCR 229 (‘Ruddock’).  In para 10, their Honours approved a statement by Bray CJ in Cretazzo v Lombardi (1975) 13 SASR 4 at 11 (applying Donald Campbell & Co Ltd v Pollak [1927] AC 732) that a power to award costs, such as that conferred on this Court by s 43 of the Federal Court of Australia Act 1976 (Cth), is a discretionary power that is ‘absolute and unfettered, except that it must be exercised judicially, not arbitrarily or capriciously, and … it cannot be exercised on grounds unconnected with the litigation’.  However, Black CJ and French J went on to note (in para 11) that, within that general discretion, it is accepted that ‘[o]rdinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order’.  After considering some types of special circumstances, which are irrelevant to the present case, their Honours discussed the argument that the proceeding before them had been brought in the public interest.  They referred, particularly, to Oshlack v Richmond River Council (1998) 193 CLR 72 and commented (in para 21) that the conclusion of the Court in that case is consistent with a subsequent observation of Kirby J (in South West Forest Defence Foundation v Department of Conservation and Land Management (No 2) (1998) 72 ALJR 1008 at 1009; 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’.

5                     In Ruddock, Black CJ and French J concluded it was appropriate to refrain from making a costs order.  Beaumont J dissented.  The circumstances underlying the majority decision were summarised by their Honours in para 28 (points 4 to 9 inclusive).  In para 29, Black CJ and French J said:

‘This is a most unusual case.  It involved matters of high public importance and raised questions concerning the liberty of individuals who were unable to take action on their own behalf to determine their rights.  There was substantial public and, indeed, international controversy about the Commonwealth's actions.  The proceedings provided a forum in which the legal authority of the Commonwealth to act as it did with respect to the rescued people was, and was seen to be, fully considered by the Court and ultimately, albeit by majority, found to exist.  The case is 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.  Having regard to its character and circumstances the appropriate disposition is that there be no order as to the costs of the appeal or the application before North J.’

6                     None of the circumstances referred to in Ruddock was present in this case.  It is true to say that the present case raised important and difficult questions of law affecting many people; that is, employees and employers engaged in the coal-mining industry.  However, standing alone, that circumstance has not generally been considered a sufficient basis upon which to refrain from making the conventional costs order.

The original respondents

7                     I do not think it is appropriate to accede to the primary submission of the applicants, by adopting a general attitude that there should be no order as to costs.  Neither do I see any other basis for depriving the first category of respondents of their costs.  They were brought into the proceeding by the applicants.  They have been wholly successful.  No action of those respondents prolonged the hearing or added to the costs incurred by the applicants.  There should be a costs order in favour of these respondents.

The intervening respondents

8                     The second and third categories of respondents are in a different situation.  They were not joined as respondents by the applicants.  They were joined at their own request.  Although the relief then sought by the applicants in the principal proceeding would not directly have affected their interests, they argued that any success by the applicants in that proceeding would affect them indirectly, by reason of the principle of stare decisis.  They said their factual position was relevantly indistinguishable from that of the first category of respondents.  It was on that basis that I acceded to the application of these companies (and others) to be joined as respondents.  However, in doing so, I warned that this would be at their own risk as to costs.  I indicated a prima facie view that it would be ‘unfair … to require the applicant to pay more than one set of costs’.

9                     The second category of respondents argue that the thrust of the applicants’ application was such that they were ‘in effect obligated to seek to be joined as parties as their interests were clearly potentially affected by the outcome of the proceedings’.

10                  If that statement is read as a claim that their interests were indirectly potentially affected, by the application of the rule of stare decisis, it is undoubtedly true.  However, litigation between two persons commonly has the potential, by the application of stare decisis, to affect the position of other persons.  In earlier times, that would not generally have been thought a sufficient justification even for allowing joinder.  A more liberal approach is often now taken, but I do not know of any case in which this type of indirect potential affectation has been held sufficient to justify increasing the costs burden of an original party to the litigation.

11                  The second category of respondents argue their position ‘was analogous to an intervener in the proceedings rather than merely respondents who sought to be joined’.  That analysis is probably correct, but it has never been the practice to apply the conventional costs rule to interveners.  This point was made in Harrigan v Department of Health (1986) 72 ALR 293 at 297.  That case arose out of a reference of law by the Administrative Appeals Tribunal.  When the matter was before the Tribunal, additional parties had been joined.  They participated in the hearing before the Full Court, opposing the case put by the applicant. The applicant failed.  However, the Full Court was not disposed to make a costs order in favour of the additional parties.  At 297, Fisher and Jackson JJ said:

‘Care needs to be exercised to ensure that a combination of a liberal attitude as to joinder before the Tribunal and the application in this Court of the usual costs rule does not result in unfairness to the party who is unsuccessful.’

12                  In Kaycliff Pty Ltd v Australian Broadcasting Tribunal (1989) 19 ALD 315 at 317, Morling J expressed the view that:

‘[i]n the absence of special circumstances … where proceedings under the [Administrative Decisions (Judicial Review) Act 1977 (Cth)] are competent in the sense that all persons against whom relief is sought are made respondents, the general rule should be that an additional respondent who is joined at his own request ought not to receive his costs if the application fails.’

I agree with counsel for the applicants that there is no justification for confining this statement of principle to proceedings for judicial review.

13                  The second category of respondents invite me to test their argument by considering whether ‘it would have been open to the CFMEU to make an application for costs against [them] if it had been successful’.  They submit it would have been open.

14                  I agree it would have been open to the applicants in the principal proceeding to make such an application.  Whether the application would have been granted is another matter.  It would be unusual to make a costs order against an intervener, except perhaps in relation to any additional costs incurred by the successful party by reason of the intervention; for example, by reason of additional evidence or hearing time.

15                  The third category of respondents accept the necessity to show special circumstances.  But they argue there were special circumstances in this case.  They say their position was not identical to that of the first category of respondents, so they should have been made respondents in the first place.  However, the only basis upon which they distinguish their position from that of other respondents is that they ‘adopted different approaches to critical issues’; that is, they emphasised different arguments.

16                  I do not doubt that a decision in favour of the applicants in the principal proceeding would have had ‘potential, wide-reaching consequences’ for the third category of respondents.  But those consequences would ensue only because of the probability that a court considering any subsequent proceeding against the third category of respondents would have been inclined (or bound if the decision in this case was at appellate level) to follow the decision in this case.  As I have already indicated, the possible application of the rule of stare decisis in a future case has not usually been regarded as a reason for allowing a person who might be involved in a future case to have the costs of a successful participation in the earlier case.

17                  I do not propose to make any order in connection with the costs incurred by the second or third categories of respondents.

The Commissioner of Taxation

18                  The Commissioner of Taxation (the 46^th respondent) was not joined at his request, but rather on the application of the applicants.  The joinder order was made at a relatively late stage.  The application for joinder was made because of a view expressed at more than one directions hearing, including by myself, that the Commissioner might be a necessary party to the proceeding.  The Commissioner has the task of administering the Superannuation Guarantee (Administration) Act 1992 (Cth).  It is part of his duty to determine whether a particular employer has a shortfall under that Act and, if so, collect the tax imposed on that employer by the Superannuation Guarantee Charge Act 1992 (Cth).  The concern was that, unless the Commissioner was a party, he would not be bound by any declaration as to calculation of any relevant charge percentage, a key element in determining the existence of a shortfall.  Unless the Commissioner was bound by the result, the present case might be a merely academic exercise.  It was under those circumstances that the applicants, reluctantly I thought, applied to join the Commissioner.

19                  It was not necessary, in order to achieve the purpose of the joinder, that the Commissioner take an active part in the proceeding.  He chose to do so, briefing senior and junior counsel.  They put before the Court detailed and helpful submissions concerning the interpretation and operation of the Act.  I am grateful for their assistance.  But this does not necessarily mean the Commissioner should recover from the applicants the costs incurred by him in relation to the case.  The Commissioner is a public official who incurred those costs in a case raising significant new issues concerning the interpretation of a statute under his administration.  The Commissioner had an interest in those issues being correctly decided.  No doubt it was for that reason that the Commissioner chose to incur the costs attendant on putting detailed submissions to the Court.

20                  There is no general rule or convention about the costs incurred in litigation by public authorities who have administration of a statute at issue.  Everything must depend upon the full circumstances of the case.  However, it has always been recognised that the fact that a party has that status is a relevant matter for consideration: see para 17 in Ruddock and the cases there cited.  In Arnold v Queensland (1957) 73 ALR 607, the status of the respondent was regarded as a factor properly to be taken into account in deciding there should be no costs order in its favour, even though the appeal failed.

21                  The Commissioner submits the ordinary costs rule should apply to the present case; the application having failed, the applicants should be ordered to pay the Commissioner’s costs.  However, it seems to me this submission overlooks the circumstances under which the Commissioner was joined, and that it was the Commissioner’s decision actively to participate in the hearing.  The submission also fails to give weight to the point emphasised by the applicants’ counsel, that the proceeding was concerned with the proper interpretation of complex and difficult provisions of a statute under the Commissioner’s administration.  The Commissioner (on behalf of the public) had an interest in that interpretation.  It is not unreasonable to leave with him the financial burden of his participation.  There should be no costs order in favour of the Commissioner.

Disposition

22                  I propose to order that the applicants pay to the first category of respondents the costs incurred by them in relation to the proceeding.  There will be no other order as to costs.

Associate:

Dated:              24 October 2003