FEDERAL COURT OF AUSTRALIA

Hutchinson v Comcare (No 2) [2017] FCA 370

ORDERS

THE COURT ORDERS THAT:

1.    There be no further order as to costs.

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

REASONS FOR JUDGMENT

BROMBERG J:

1    By the operation of my self-executing order dated 26 October 2016, the Second Further Originating Application of the applicant (“Ms Hutchinson”) was dismissed on 6 February 2017. By an interlocutory application dated 29 January 2017, Ms Hutchinson applied to set aside that self-executing order before it came into effect. On 6 February 2017 I dismissed Ms Hutchinson’s interlocutory application. My reasons for dismissing the interlocutory application, including the relevant background to the proceeding as a whole, are set out in Hutchinson v Comcare [2017] FCA 136.

2    The respondent (“Comcare”) now seeks its costs of the proceeding.

3    In broad terms, I dismissed the Ms Hutchinson’s application because she had proved incapable of pleading a reasonable cause of action, despite having been provided with leave to make five attempts at drafting a statement of claim. Ms Hutchinson had prepared each of those pleadings unassisted by any lawyer. My orders of 26 October 2016 gave Ms Hutchinson conditional leave to file and serve a proposed Fourth Further Amended Statement of Claim if that document had been prepared and certified by a lawyer. When she was unable to secure representation and thereby exercise that leave, the self-executing order dismissing the application took effect.

4    The Court’s general power to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) is qualified in relation to proceedings brought under the Fair Work Act 2009 (Cth) (“FW Act”) by s 570 of that Act. Section 570 provides as follows:

570    Costs only if proceedings instituted vexatiously etc.

(1)    A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.

Note:    The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.

(2)    The party may be ordered to pay the costs only if:

(a)    the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

(b)    the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

(c)    the court is satisfied of both of the following:

(i)    the party unreasonably refused to participate in a matter before the FWC;

(ii)    the matter arose from the same facts as the proceedings.

5    Comcare contended that Ms Hutchinson’s “conduct with respect to the pleading of her claim” amounted to unreasonable acts or omissions for the purposes of s 570(2)(b) of the FW Act, enlivening my discretion to award costs. Specifically, Comcare pointed to Ms Hutchinson’s defective pleadings and asserted that they were discursive, rambling and oppressive, failed to inform Comcare of the case it had to meet, and that Ms Hutchinson maintained “this approach” despite being put on notice of their defects by Comcare and the Court. Comcare also pointed to Ms Hutchinson’s late abandonment of parts of her claim and late concessions in respect of deficiencies in her pleading at the hearing of Comcare’s strike-out application on 28 September 2016 and 26 October 2016, despite having opposed that application.

6    At the hearing of Comcare’s strike-out application on 26 October 2016, I awarded Comcare its costs thrown away by reason of the filing of the Third Further Amended Statement of Claim. I gave ex tempore reasons for determining that my discretion to do so under s 570(2) had been enlivened by Ms Hutchinson’s unreasonable acts or omissions. I there said that there does come a point at which errors compounded upon other errors in circumstances where both notice of the errors or deficiencies and the potential for costs consequences, should they be repeated, mandate that the continuance of error is unreasonable.

Consideration

7    I generally agree with the observations of Mortimer J in Ryan v Primesafe [2015] FCA 8 at [64], as endorsed by the Full Court (Siopis, Collier and Katzmann J) in Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [8], that the purpose of s 570 of the FW Act is to ensure that fear of a costs order does not discourage genuine litigants from pursuing cases with reasonable cause. The provision is concerned with access to justice.

8    With this in mind, the occasions upon which costs will be awarded under s 570 are likely to be exceptional: Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199; 156 FCR 275 at [60] (Black CJ, North and Mansfield JJ). The fact that a party has conducted litigation inefficiently, made late concessions, or adopted a misguided approach will be relevant to, but not conclusive of, the party having acted unreasonably in a sense relevant to s 570(2)(b): Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143; 170 FCR 574 at [29] (Tamberlin, Gyles and Gilmour JJ).

9    Besides the filing of the Third Further Amended Statement of claim, to which I will shortly return, I am not persuaded that Ms Hutchinson’s conduct in the proceeding, pointed to by Comcare in its submission, amounted to unreasonable acts or omissions for the purposes of s 570(2)(b).

10    Comcare referred me to the case of Bhagat v Royal & Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 at [13] (Hodgson CJ). However, I do not consider that case to be of any assistance to Comcare in circumstances where the Court’s discretion to make a costs order is constrained by s 570. As the passage cited by Comcare contemplates, a court does have to make allowances for the position of unrepresented litigants. The actions of unrepresented litigants will be viewed more sympathetically by courts in relation to costs than the actions of represented parties. In Bhagat that proposition manifested as an order for the unrepresented litigant to pay party-party costs in circumstances where a represented party would likely have been liable for indemnity costs.

11    The rationale for that approach is bolstered in relation to proceedings brought under the FW Act by the purpose of s 570 as outlined above. It is important to ensure that the disincentive of potential costs orders do not impact more severely upon persons unable to obtain legal representation.

12    Manifest deficiencies in the pleadings of unrepresented parties are not exceptional. While they may justify the making of a costs order in another jurisdiction, they do not necessarily justify the making of an order under s 570(2)(b). The clear deficiencies in the various iterations of Ms Hutchinson’s statement of claim, sufficient to warrant them being struck out, were attributable to Ms Hutchinson’s lack of capacity and training to prepare a proper pleading.

13    As I have said, I awarded Comcare its costs in relation to the filing of Ms Hutchinson’s Third Further Statement of Claim. By the time of the filing of that document, Ms Hutchinson had had four prior opportunities to prepare a satisfactory pleading. Each had invited criticism from Comcare. Although I consider that unreasonableness cannot be founded upon incapacity alone, there comes a point where an unrepresented litigant will take an unreasonable step by continuing to press his or her case after the point at which they should have realised their own incapacity. The unreasonableness is founded not in the incapacity alone but in the failure to recognise the incapacity when there has been sufficient notice of it.

14    That point in Ms Hutchinson’s case was reached at the time of the filing of the Third Further Statement of Claim. I do not consider any of her conduct before that time, as it related to the preparation and filing of her deficient pleadings, enlivened my discretion to award costs. As I have indicated, the fact that Ms Hutchinson was unrepresented is a matter of some significance, and her inability to prepare a pleading could not alone found an unreasonable step or omission for the purposes of s 570(2)(b). Comcare has also asked for its costs arising from the conduct of Ms Hutchinson in relation to certain interlocutory steps taken before the filing of the Third Further Statement of Claim, but it has made no submission to explain how that conduct was unreasonable.

15    Since the filing of the Third Further Statement of Claim, Ms Hutchinson has not filed any further pleading. She has, in accordance with my orders of 26 October 2016, sought to obtain legal representation to assist her to prepare a further pleading, and, when it appeared as though she may have succeeded in so doing, sought an extension of time to comply with those orders. Insofar as Comcare has incurred any costs through that process (it has not identified any costs it has incurred), I do not consider them to have been incurred as a result of any unreasonable act or omission of Ms Hutchinson.

16    A different outcome may have resulted if I had been satisfied that the steps taken by Ms Hutchinson were motivated by ill-will or malice or were vexatious. Comcare did not seek to make that case. Similarly, I might have been more attracted to the proposition that Ms Hutchinson’s meritless interlocutory application of 29 January 2017 was an unreasonable step, however no specific submission in relation to that interlocutory application was put by Comcare beside the bare claim for its costs of defending it.

17    For those reasons, I have determined that there be no further order as to costs.

Associate:    

Dated:    7 April 2017