FEDERAL COURT OF AUSTRALIA

Hutchinson v Comcare (No 5) [2019] FCA 1665

ORDERS

THE COURT ORDERS THAT:

1.    The applicant pay the respondent’s costs of the proceeding.

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

REASONS FOR JUDGMENT

BROMBERG J:

1    By order dated 25 July 2019 I dismissed the applicant’s (“Ms Hutchinson”) application for compensation under s 14 the Public Interest Disclosure Act 2013 (Cth) (“PID Act”). My reasons for dismissing Ms Hutchinson’s application, including the relevant background to the proceeding, are set out in Hutchinson v Comcare (No 4) [2019] FCA 1133 (“reasons for judgment”). These reasons deal with the question of whether Ms Hutchinson should pay the respondent’s (“Comcare”) legal costs.

2    The Court’s general power to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) (“Federal Court Act”) is qualified in relation to proceedings brought under the PID Act by s 18 of that Act.  Section 18 provides as follows:

(1)    In proceedings (including an appeal) in a court in relation to a matter arising under section 14, 15 or 16, the applicant for an order under that section must not be ordered by the court to pay costs incurred by another party to the proceedings, except in accordance with subsection (2).

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

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

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

3    Section 18 of the PID Act is in relevantly identical terms to s 570 of the Fair Work Act 2009 (Cth). There is no reason why the principles applicable to s 570 should not be applied to s 18 of the PID Act, particularly as there is no authority on the operation of s 18: Clement v Australian Bureau of Statistics [2016] FCA 948 at [54] (Katzmann J).

4    The discretion to award costs under s 18 of the PID Act in an otherwise no-costs jurisdiction is one that must be exercised with caution and the case for its exercise should be clearly demonstrated: Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [8] (Siopis, Collier and Katzmann JJ) citing Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] (Bromberg J) and Ryan v Primesafe [2015] FCA 8 at [64] (Mortimer J); see also Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 at [29] (Tamberlin, Gyles and Gilmour JJ).

5    Ms Hutchinson made the following arguments in her application that no order as to costs be made. None of those contentions were helpful or directed at the criteria in s 18 of the PID Act:

    that the costs of the proceeding would likely be very substantial and that Ms Hutchinson has limited means as she is living off a disability support pension following the cessation of her Comcare compensation claim;

    that it was likely she was never going to be able to satisfy s 13(c) of the PID Act due to the onus of proof residing with her;

    that the onus of proof on the applicant allows government departments to exploit and use the deficiencies in the PID Act to ensure they are never held to account;

    that Ms Hutchinson has genuinely attempted to bring matters to Court without any vexatious intent;

    that Ms Hutchinson is a self-represented litigant; and

    that Ms Hutchinson will not vex Comcare again with a proceeding that lacks real or apparent merit.

6    Comcare filed a detailed submission in response directed at s 18 of the PID Act. Ms Hutchinson declined to file a submission in reply.

7    Comcare’s submission contended that the bar on a costs order provided by s 18(1) of the PID Act was inapplicable because of one or more of the following exceptions provided by s 18(2):

(a)    The proceeding was brought vexatiously;

(b)    The proceeding was instituted without reasonable cause; or

(c)    Ms Hutchinson’s unreasonable act of instituting the proceeding caused Comcare to incur costs.

8    It is only necessary that I deal with whether the proceeding was instituted without reasonable cause. For the following reasons, I consider that it was. Accordingly, an exception required by s 18(2) to allow an order for costs to be made is established.

Proceeding instituted without reasonable cause

9    In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) (2015) 230 FCR 337 at [13]-[17], Logan, Bromberg and Katzmann JJ followed the reasoning in Australian Workers’ Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428 (Dowsett, McKerracher and Katzmann JJ) regarding the relevant approach to be taken to determine whether a proceeding has been instituted without reasonable cause. Relevantly, the question that the Court must ask itself is whether the proceeding had reasonable prospects of success at the time it was instituted, not whether it ultimately failed.

10    In order for the proceeding to have succeeded, Ms Hutchinson needed to satisfy the Court of the requisite elements of s 13 of the PID Act which I detailed at [31] of my reasons for judgment, and which are as follows:

(a)    that a Comcare employee by act or omission (“detrimental conduct”) caused Ms Hutchinson detriment: s 13(1)(a);

(b)    that when the detrimental conduct was taken, the Comcare employee believed or suspected that Ms Hutchinson may have made or proposes to make a PID (“PID belief”): s 13(1)(b); and

(c)    that the PID belief is the reason, or part of the reason, for the detrimental conduct (“prohibited reason”): s 13(1)(c).

11    As my reasons for judgment set out, Ms Hutchinson failed, inter alia, to satisfy the third requisite element, the ‘prohibited reason’, for each allegation of reprisal action made by her. If, at the time the proceeding was instituted, Ms Hutchinson had no reasonable prospect of demonstrating at trial the existence of that essential element it would follow, that at that time, the proceeding had no reasonable prospect of success.

12    An assessment of whether a reasonable prospect of success existed at the time that the proceeding was commenced needs to take into account practical forensic considerations, including whether there was a reasonable prospect that the evidentiary case necessary for Ms Hutchinson’s success at trial would be available for Ms Hutchinson to rely upon at the trial.

13    Although she may not have been aware of it at the time she commenced the proceeding, Ms Hutchinson had the onus of proof on all issues. No aspect of that onus is reversed by the provisions of the PID Act. At the trial, Ms Hutchinson called no direct evidence from any of the more than twenty five persons whose state of mind her case put in issue and in respect of which the onus was on Ms Hutchinson to substantiate the existence of the “prohibited reason” in relation to each of the alleged reprisals. Nor was there evidence called at trial which, in the absence of direct evidence from those persons, permitted an inference to be drawn that a “prohibited reason” existed in relation to any of the alleged reprisal actions.

14    The prospect of Ms Hutchinson’s success in being able to demonstrate a “prohibited reason” for each alleged reprisal at the time that the proceeding was issued, must be assessed by reference to what Ms Hutchinson knew and the evidence likely to be available to her to call in the context of the strategy that she intended to employ to bring her evidentiary case before the Court.

15    The following extract of a statement made by Ms Hutchinson taken from the transcript of the proceeding for 13 September 2017, exemplifies the flawed approach taken to the proceeding by Ms Hutchinson in relation to the evidentiary case which she needed to establish and in particular the evidence necessary to establish the existence of a “prohibited reason” in relation to each of the alleged reprisal actions:

I don’t know – I cannot with any certainty say that I know for a fact that she is doing this because I made a public interest disclosure about her, but it…I can only suggest that the only way to know would be to question the decision-makers and ask them why they’ve done this

…

Without the evidence of the decision-makers, there’s nothing more that I can put that can convince you of my claim. I do not know why they have done the things that they’ve done. I can only assume that it’s because I made a public interest disclosure, which specifically was related to the behaviours of Helen Dunn and the assistant director, Jenny Schultz. And it has been continual since they took over my claim. But like I said, I – you know, unless they are actually deposed and satisfy the court of their intentions, then there’s really nothing more that I can put to you that can convince you of my claim…its quite obvious and I certainly understand your position that you certainly need more than just speculation on why these things have been done. But the fact is that these things have been done. They have occurred and there is reasoning and – there’s reasoning behind it. It’s not the product of a mistake or administrative burden. This is – its personal and, I mean, as you say, it may simply be because Ms Dunn doesn’t like me and I annoy her. But the fact that I’ve made a public interest disclosure effectively about the fact that the behaviour seems to indicate that Ms Dunn doesn’t like me and that I do annoy her and, subject to that, she does things in the management of my claim, that seems to be a very reasonable proposition, a very normal proposition, that somebody would do those things, especially, as I said, because the potentially [sic] my public interest disclosure of December 2015 was really all about the complaint about Helen Dunn and Jenny Schultz.

16    Those observations made by Ms Hutchinson help to demonstrate that the following matters existed at the time the proceeding was issued:

(a)    Ms Hutchinson was merely speculating that the “prohibited reason” was held by each of the persons whose conduct her proceeding impugned, having no direct or indirect knowledge of those matters or access to any records that tended to prove that those reasons were held; and

(b)    Ms Hutchinson had no intention to call the persons in question to give direct evidence as to those matters, believing that Comcare would do so.

17    Despite what Ms Hutchinson may have believed, Comcare did not have the legal onus on the issue of whether a “prohibited reason” was held by each of the persons in question. It would only have become necessary for Comcare to call those persons if the evidence called by Ms Hutchinson was sufficiently strong to have shifted the evidentiary onus to Comcare. On the basis that the evidence that was called by Ms Hutchinson at trial was the evidence available to her to be called at the time the proceeding was instituted, there was no reasonable basis for thinking that, at the time, Comcare would call the persons in question.

18    Accordingly, at the time the proceeding was instituted there was no reasonable prospect that direct evidence would be placed before the Court as to the state of mind of the persons whose conduct the proceeding impugned and in particular whether those persons held the “prohibited reason”. Furthermore, there was no basis for thinking that, if called, each of those persons would give evidence that they held the “prohibited reason”.

19    Furthermore, assuming again that the evidence available to Ms Hutchinson at the time the proceeding was instituted was the evidence put before the Court at trial, at the time the proceeding was instituted, there was no reason for thinking that the evidence that would be called at trial would permit an inference to be drawn that a “prohibited reason” existed in relation to any of the alleged reprisal actions.

20    For those reasons, I am satisfied that Ms Hutchinson instituted the proceedings without reasonable cause within the meaning of s 18(2)(a) of the PID Act. The bar ordinarily imposed by s 18(1) on the making of a costs order is not applicable.

21    In exercising my discretion under s 43 of the Federal Court Act to award costs, I have taken into account that, in the absence of special circumstances that justify some other order, the usual order is that the losing party should pay the legal costs of the successful party: Summers v Repatriation Commission (No 2) [2015] FCAFC 64 at [14] (Kenny, Murphy and Beach JJ). None of the contentions made by Ms Hutchinson and set out about at [5] provide a sufficient basis for the usual order not to be made. Accordingly, I will make an order that Ms Hutchinson pay Comcare’s costs of the proceeding.

Associate:

Dated:    11 October 2019