FEDERAL COURT OF AUSTRALIA

Reading v Partnership of Western Diagnostic Pathology (No 2) [2008] FCA 1636

Bhagat v Global Custodians Ltd [2002] FCA 223

Reading v Partnership of Western Diagnostic Pathology [2008] FCA 1381

DR LEONIE CARMEN READING v PARTNERSHIP OF WESTERN DIAGNOSTIC PATHOLOGY, DR VINCENT CARUSO, DR MICHAEL ARMSTRONG, DR BRUCE LATHAM, DR GEORGE CRAWFORD, DR KEVIN TROWN, DR ANDREW MCQUILLAN, DR SUKEERAT RUBA, DR PETER GARCIA WEBB and DR KENNETH MITCHELL

WAD 94 of 2008

MCKERRACHER J

5 November 2008

PERTH

THE COURT ORDERS THAT:

1.                  The applicant do pay the costs of the third and fourth respondents to be taxed if not agreed.

2.                  The applicant do pay the costs of the first, fifth and tenth respondents fixed at $9,000.

3.                  The applicant do pay the costs of the ninth respondent to be taxed if not agreed.

4.                  The applicant is to file and serve an amended points of claim on or before 25 November 2008.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                     On 9 September 2008 judgment was given in Reading v Partnership of Western Diagnostic Pathology [2008] FCA 1381.  As against the third and fourth respondents the application was dismissed.  Other orders were made including leave to file and serve within 6 weeks, a fresh amended points of claim on certain terms.  Certain issues were struck out.  Submissions on costs of that application have now been received. 

First, Fifth and Tenth Respondents’ Costs

2                     These respondents point to the fact Dr Reading filed the claim on 8 May 2008.  It was lengthy and did not comply with the Federal Court Rules in a number of respects.  Dr Reading was ordered to substitute the claim with a points of claim document more succinctly particularising the issues.  A points of claim document was filed which was slightly clearer.  It still contained many defects as a consequence of failing to comply with earlier orders made on 25 June 2008.  That failure necessitated a further hearing on 10 July 2008 resulting in the decision of 9 September 2008.  The decision largely upheld the respondents’ submissions and Dr Reading has been given a further opportunity to articulate her points of claim. 

3                     Dr Reading had been put on notice concerning a costs application from the second directions hearing held on 25 June 2008.  She was advised by the Court to obtain legal representation.  She has had representation in the past but has not obtained legal representation in these proceedings. 

4                     These respondents have attended three directions hearings.  Counsel appeared at the latter two hearings.  Submissions have been made in relation to Dr Reading’s Form 167 consisting of 84 pages.  Detailed submissions have been filed.  The respondents have reviewed Dr Reading’s points of claim consisting of 46 pages and filed further submissions in relation to the points of claim and her further supporting affidavit consisting of 47 pages.

5                     The respondents argue that costs should follow the event and the fact that Dr Reading is a litigant in person should not displace the normal rule (Bhagat v Global Custodians Ltd [2002] FCA 223. 

6                     Costs in the amount of $9,000 are sought. 

7                     To those submissions Dr Reading requests an adjournment of any decision on costs to prevent the incurring of further costs and because Dr Reading and the first respondent have reached an ‘agreed in principle settlement’ on 30 September 2008 making provision for settlement of all issues in dispute as well as provision for costs.  A request for adjournment of the costs order is sought. 

8                     As observed in the first judgment, mediation of this matter is highly desirable.  However there are difficulties with the request raised by Dr Reading.  The first is that any settlement with the first respondent does not automatically settle the dispute with all of the other respondents.  Some of those respondents have been separately represented, have incurred additional cost, are not said to be involved in the settlement discussions involving the first respondent and are entitled, now, to relief following the first judgment.  While further cost, delay and disputation if unnecessary is to be avoided, there is no evidence before the Court as to the state of negotiations with the other parties.  In those circumstances I have little option other than to deal with the applications that have been made at this point for costs and other relief.  While I would also order mediation at this stage, I am reluctant to do so when some of the parties are unlikely to remain personally involved in the litigation for the reasons addressed in the first judgment.  Even mediation involves some expense which may in some cases be unnecessary.  What I will however do through these reasons is make it clear that if any party wishes to participate in a mediation conducted by a Registrar or Deputy District Registrar of this Court that a submission in writing to that effect should be made and will be considered.

Third and fourth Respondents

9                     The application in relation to these respondents was wholly successful.  There is no reason why costs should not follow the event.  Dr Reading argues that there should be no order for costs as the judgment was in the public interest.  The argument on the public interest ground is based on the fact that the judgment involved a precedent in the interpretation of the HREOC Act relating to treatment of ex-partners in a dispute involving a partnership and clarification of issues relating to joint and several liability in a partnership. 

10                  Dr Reading relies on the fact that her actions were not vexatious or doomed to failure in view of the lack of precedent, that she was unrepresented and that the award of costs was discretionary.  She seeks an award that the third and fourth respondents should meet their own costs.  I do not accept that argument.

11                  In light of the history outlined in the judgment of 9 September 2008 and this judgment, I do not accept that the third and fourth respondents should have been put to expense in defending these proceedings and I consider that there is no good reason why costs should not follow the event.  I will order that Dr Reading pay the costs of the third and fourth respondents to be taxed if not agreed.

Ninth Respondent

12                  I consider that the submissions made on behalf of the first, fifth and tenth respondents apply similarly to the ninth respondent.  The ninth respondent has sought costs on an indemnity basis.  While that claim has some merit, it seems to me that much of the conduct of Dr Reading in the conduct of the proceedings to date has been caused by confusion or unfamiliarity with the detail of the legal process.  I do not think her conduct has been sufficiently unreasonable to require her to pay costs on an indemnity basis.  In that regard, it is difficult to distinguish the position of the ninth respondent from some of the other respondents.  I will therefore order that Dr Reading pay the costs of the ninth respondent to be taxed if not agreed. 

13                  The ninth respondent has also sought dismissal.  Although the substance of my reasons in Reading[2008] FCA 1381 would support such a submission, it is appropriate that there be a suitable motion for dismissal.  If the matter can be dealt with by consent, that would be a saving of costs. 

Amended Points of Claim

14                  In the judgment of 9 September 2008, I ordered that Dr Reading file and serve an amended points of claim within 6 weeks from the date of the judgment (21 October 2008).  I subsequently allowed Dr Reading an extension of two weeks.  As the date by which the further amended points of claim was to be filed has now expired, it will be necessary to give Dr Reading a limited extension only within which to file and serve such a document.  I will allow a further 21 days only.

15                  Accordingly, I make the following orders:

1.         The applicant do pay the costs of the third and fourth respondents to be taxed if not agreed.

2.         The applicant do pay the costs of the first, fifth and tenth respondents fixed at $9,000.

3.         The applicant do pay the costs of the ninth respondent to be taxed if not agreed.

4.         The applicant is to file and serve an amended points of claim on or before 25 November 2008.

Associate:

Dated:         5 November 2008