FEDERAL COURT OF AUSTRALIA

Mentink v Secretary, Department of Social Services (No 2) [2015] FCA 667

THE COURT ORDERS THAT:

1.    Pursuant to rr 1.32 and 1.36 of the Federal Court Rules 2011, the question of the disposition of costs of the principal proceeding is determined on the papers and judgment on the issue of costs is published from Chambers.

2.    The appellant pay the costs of the respondent of and incidental to the proceeding in a lump sum of $800.00.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    On 18 May 2015, judgment was delivered in the proceeding. The orders made that day were that Mr Mentink’s application is dismissed and that the parties file and serve written submissions in relation to the question of costs within three weeks.

2    Submissions in relation to the disposition of the costs have now been filed and served.

3    These reasons are concerned with the disposition of the costs of and incidental to the principal proceeding. These reasons should be read together with the reasons published in relation to the disposition of the principal proceeding: Mentink v Secretary, Department of Social Services [2015] FCA 473.

4    The respondent contends that there should be an order that the appellant pay its costs fixed in an amount of $6,000 pursuant to r 40.02(b) of the Federal Court Rules 2011. That rule provides that a party who is entitled to costs may apply to the Court for an order that costs be awarded in a lump sum instead of or in addition to any taxed costs. The first question then is whether the respondent is entitled to an order for costs and secondly, whether that entitlement ought to be the subject of an order that the costs be awarded in a lump sum.

5    Plainly enough, except as provided by any other Act, the award of costs is in the discretion of the Court: s 43(2) of the Federal Court of Australia Act 1976. The discretion is widely conferred for the purpose of doing justice between the parties in relation to the costs of the proceeding.

6    In his written submissions in the principal proceedings, Mr Black, counsel for the respondent, observed, correctly in my view, that the decision of the Tribunal is “expressed in a somewhat unorthodox manner” having regard to the decision the subject of review before the Tribunal. In the course of my reasons published on 18 May 2015, I observed that to some extent aspects of the Tribunal’s statement of reasons were described a little elliptically. The point of these observations, for present purposes, is that the statement of reasons in support of the Tribunal’s decision presented Mr Mentink with some difficulties in terms of clearly understanding, as a self-represented litigant, the precise basis upon which the Tribunal reached a decision. I regard that consideration as relevant to the exercise of the discretion in relation to costs conferred by s 43(2) of the Federal Court of Australia Act 1976. Nevertheless, I do not accept that the “somewhat unorthodox manner” of expression of the Tribunal’s decision is such that, by reason of that circumstance alone, there ought to be no order as to costs.

7    Mr Mentink in his written submissions places emphasis upon two matters. The first is concerned with his assessment of the merits of the determination of the substantive questions in issue in the proceeding. He challenges aspects of the Court’s reasoning. I do not regard those matters as relevant to the question of costs. The second factor is concerned with Mr Mentink’s general impecuniosity and the financial distress he has suffered in recent years attributable to the cancellation of his age pension.

8    I accept that Mr Mentink is confronting difficult financial circumstances and that his resources are “very limited”. The respondent accepts that this is the position confronting Mr Mentink. The respondent also accepts that there are “limited prospects” of recovering from Mr Mentink the additional costs of taxation. There thus seems to be very little to be served in terms of doing justice between the parties of imposing a costs order upon Mr Mentink in circumstances where his financial resources are very limited and there are limited prospects of the respondent recovering the additional costs of taxation. How is the public interest served by ordering Mr Mentink to pay the respondent’s costs of the proceeding? Costs are not awarded for the purpose of penalising an unsuccessful party. An award of costs recognises that a meritorious party has been put to expense in addressing contentions of another shown to be unmeritorious and that it is fair and reasonable, by and large, that a successful party is entitled to an order providing some degree of restitution for the costs that party has incurred in responding to the claim. In his submissions, Mr Mentink also contends, as he contended in the principal proceeding, that these circumstances place a substantial burden not only upon him but also his family.

9    I am not satisfied that a proper exercise of the discretion involves making an order for costs against Mr Mentink of the kind sought by the respondent. The respondent says that the total costs and disbursements incurred in relation to addressing Mr Mentink’s contentions amounted to $21,809.51 as at 5 June 2015. The respondent’s solicitor estimates that a sum of between $12,000 and $15,000 would, in all probability, be recoverable on a taxation of the respondent’s costs (presumably on a party and party basis). The respondent says that the lump sum amount sought by way of costs of $6,000 is about 50% of the lower estimate of the amount recoverable on taxation.

10    It seems to me that there ought to be an order in favour of the respondent on the question of costs. However, having regard to the difficulties associated with the way in which the Tribunal expressed its reasons for decision, the purposes to be served by an order for costs and Mr Mentink’s particular circumstances, the amount to be fixed as a lump sum award ought to be significantly discounted.

11    I propose to order that Mr Mentink pay the costs of the respondent fixed in an amount of $800.00.

Associate:

Dated:    2 July 2015