FEDERAL COURT OF AUSTRALIA

Duncan v Chief Executive Officer, Centrelink (No 2) [2008] FCA 667

PRACTICE AND PROCEDURE – s 43 Federal Court of Australia Act 1976 (Cth) – discretion to award costs – circumstances justifying departure from the general rule

Federal Court of Australia Act 1976 (Cth) s 43

Freedom of Information Act 1982 (Cth) s 9

Administrative Decisions (Judicial Review) Act 1977 (Cth) s 13(3)

Duncan v Chief Executive Officer, Centrelink (2008) 100 ALD 292 cited

Cachia v Hanes (1994) 179 CLR 403 cited

Cummings v Lewis (unreported, Wilcox J, 29 May 1992) cited

Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166 cited

Cretazzo v Lombardi (1975) 13 SASR 4 cited

Re Wilcox;  Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 cited

Latoudis v Casey (1990) 170 CLR 534 cited

Ruddock v Vadarlis (2001) 115 FCR 229 cited

Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660 cited

Perrett v Commissioner for Superannuation (1991) 29 FCR 581 cited

Wilderness Society Inc v Hon Malcolm Turnbull, Minister for Environment and Water Resources [2008] FCAFC 19 cited

Dal Pont, Law of Costs (2003)

IAN DUNCAN v CHIEF EXECUTIVE OFFICER, CENTRELINK

NO WAD 297 of 2006

FINN J

14 MAY 2008

ADELAIDE (HEARD IN PERTH)

THE COURT ORDERS THAT:

1.         The applicant pay 60 per cent of the respondent’s costs on a party/party basis. 

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

REASONS FOR JUDGMENT

1                          When delivering judgment in the principal proceeding in which I dismissed Mr Duncan’s application:  see Duncan v Chief Executive Officer, Centrelink (2008) 100 ALD 292;  I ventured to suggest that this may be an appropriate matter in which to make no order as to costs.  Nonetheless I invited submissions on costs.  Needless to say each party sought a costs order.  Mr Duncan relies upon what he contends was Centrelink’s demonstrated “disdain for the law” although, as the costs of his pro bono counsel are not being sought, any costs order in his favour would in any event be limited to out-of-pocket expenses:  see Cachia v Hanes (1994) 179 CLR 403;  and see generally Dal Pont, Law of Costs (2003) [7.24] ff.  Centrelink’s claimed entitlement to a costs award was founded upon the principle that, ordinarily, costs follow the event.  It contends that it did not unreasonably provoke the litigation:  cf Cummings v Lewis (unreported, Wilcox J, 29 May 1992);  the defensive postures it took, though unsuccessful in some degree, were not unreasonable:  Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166 at 169;  and the applicant was wholly unsuccessful.

2                          The principles that inform the exercise of the Court’s discretion to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) are well accepted.  That discretion is absolute and unfettered but must be exercised judicially and cannot be exercised on grounds unconnected with the litigation:  see Cretazzo v Lombardi (1975) 13 SASR 4 at 11;  Re Wilcox;  Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 at 732.  Neither can the power to award costs be used to punish either a successful or an unsuccessful party:  cf Latoudis v Casey (1990) 170 CLR 534 at 566-567. 

3                          Equally well accepted are the principles informing the proper exercise of the s 43 discretion.  These are:

(i)         ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order; 

(ii)        where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed;  and

(iii)       a successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties’ costs of them.  In this sense ‘issue’ does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.

Ruddock v Vadarlis (2001) 115 FCR 229 at [11] approving Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660;  ATPR 40-748 at 48,136.  See generally Dal Pont, Laws of Cost (2003) ch 8.  Only the first of these is presently relevant. 

4                          Notwithstanding the ordinary principle of costs following the event, there are two considerations of potentially present relevance of which account properly can be taken in justification of a departure from that principle.  These are the reasonableness of the applicant in bringing the application and where the respondent, as in this case, is a public authority, the general importance both of the clarification of the law for such an authority and of securing proper compliance with it:  see eg Perrett v Commissioner for Superannuation (1991) 29 FCR 581 at 594;  see also Wilderness Society Inc v Hon Malcolm Turnbull, Minister for Environment and Water Resources [2008] FCAFC 19 at [7].

5                          In the principal proceeding I concluded that the application should be dismissed, not because the respondent properly understood and complied with its obligations to the public under the Freedom of Information Act 1982 (Cth) or the Administrative Decisions (Judicial Review) Act 1977 (Cth), but because there would be no utility in granting the relief sought in the events which had happened.  It is not unfair to say that Mr Duncan’s requests and in the event this litigation have been instrumental in leading Centrelink to an understanding of its responsibilities under the two Acts and of its compliance obligations.

6                          Though Centrelink wrote to Mr Duncan on 4 October 2006 giving reasons why it considered it need not provide him with a statement of reasons given it had furnished him with a copy of the FOI manual he sought, I consider it likely that he did not receive that letter until after he commenced the present proceedings.  If it be thought that by providing Mr Duncan with the manual Centrelink had complied with its obligation to the public under s 9 of the FOI Act, the contrary was the case.  It was only in September of 2007 that public notification was given that the manual was available for inspection and purchase.  This was long after the first hearing in this matter.

7                          I equally am not satisfied that, if the respondent CEO had complied with the statutory obligations imposed by s 13(3) of the AD(JR) Act in responding to Mr Duncan’s requests, Mr Duncan would not have desisted from taking the litigious course that he did even though it was as I found ultimately doomed.

8                          There has, in my view, been an important benefit secured by this proceeding in the administration of the FOI Act by Centrelink notwithstanding Mr Duncan’s lack of success.

9                          While I do not consider that no order as to costs should be made – two of Mr Duncan’s three claims were struck out at the first hearing – I am satisfied that it would be appropriate to limit the costs to be recovered by the respondent.  In the circumstances, I am satisfied that an order that Mr Duncan pay 60 per cent of the respondent’s costs on a party/party basis should be made.

Associate:

Dated:         14 May 2008