Federal Court of Australia

Saunders on behalf of the Bigambul People v State of Queensland (No 3) [2021] FCA 444

ORDERS

THE COURT ORDERS THAT:

1.    There be no order as to the costs of the proceeding.

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

REASONS FOR JUDGMENT

RANGIAH J:

1    In Saunders on behalf of the Bigambul People v State of Queensland (No 2) [2021] FCA 190 (Bigambul (No 2)), I ordered that the applicant’s application under ss 50(2) and 61(1) of the Native Title Act 1993 (Cth) (the NTA) for a determination of compensation be struck out.

2    It is now necessary to decide the question of costs. The parties have exchanged written submissions as to costs.

3    In its application to strike out the compensation application, the State of Queensland (the State) sought an order that the State’s costs be paid by the applicant’s solicitor personally. However, the State no longer seeks that order and submits that there should be no order as to costs as between the applicant and the State. That position is, naturally, accepted by the applicant.

4    The second respondent, Queensland South Native Title Services (QSNTS), seeks an order that David Stevenson pay QSNTS’ costs of the proceeding. QSNTS’ submissions describe Mr Stevenson as the solicitor for the applicant, although the solicitors on the record are ESJ Law Pty Ltd. QSNTS does not seek any order that the applicant himself pay costs.

5    The fourth to seventh respondents are four Bigambul persons and the third respondent is the Bigambul Native Title Aboriginal Corporation RNTBC (Bigambul RNTBC) (collectively the Indigenous respondents). They seek an order that the applicant pay their costs on an indemnity basis and, in addition, seek an order that “the [a]pplicant’s lawyer” (presumably ESJ Law Pty Ltd) pay those costs personally.

6    The applicant opposes the orders sought by QSNTS and the Indigenous respondents.

7    The procedural history of the proceeding is relevant. The compensation application in Form 4 was filed on 23 December 2019. The State filed its interlocutory application to strike out the compensation application on 4 March 2020.

8    A first case management hearing was held on 6 March 2020 as part of the Queensland Southern Region callover. QSNTS and the Indigenous respondents were not yet parties but were granted leave to appear. At the case management hearing, the applicant conceded that the compensation application was defective, but foreshadowed an application for leave to amend.

9    On 18 March 2020, QSNTS filed a notice in Form 5 that it wanted to become a party to the compensation proceeding. On 19 March 2020, the Indigenous respondents filed their Form 5s. In Saunders on behalf of the Bigambul People v State of Queensland [2020] FCA 563, I held that QSNTS and the Bigambul RNTBC had become parties when they filed their Form 5s, and I also ordered that the fourth to seventh respondents be joined as parties.

10    On 20 April 2020, the applicant filed an interlocutory application seeking that the Court request that the State Minister and the Native Title Registrar conduct property searches pursuant to s 83A of the NTA. On 12 June 2020, the applicant filed another interlocutory application seeking leave to amend the Form 4 compensation application.

11    In Bigambul (No 2), I held that the Form 4 compensation application had failed to identify any compensable act and had failed to identify any area covered by the application. I ordered that the compensation application be struck out on the basis that, contrary to the requirement of s 61(5)(c) of the NTA, it failed to contain certain prescribed information. I refused the application for leave to amend to identify compensable acts, on the basis that this would result in the inclusion of areas not covered by the original application and would offend s 64(1) of the NTA. I considered it unnecessary to determine the merits of the applicant’s application for the Court to make a request under s 83A(1) of the NTA.

12    Section 43 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) provides, relevantly:

43    Costs

(1)    The Court or a Judge has jurisdiction to award costs in all proceedings before the Court…other than proceedings in respect of which this or any other Act provides that costs must not be awarded…

    …

(2)    Except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.

(3)    Without limiting the discretion of the Court or a Judge in relation to costs, the Court or Judge may do any of the following:

…

(f)    order a party’s lawyer to bear costs personally;

…

13    Section 85A of the NTA provides:

85A    Costs

(1)    Unless the Federal Court orders otherwise, each party to a proceeding must bear his or her own costs.

Unreasonable conduct

(2)    Without limiting the Court’s power to make orders under subsection (1), if the Federal Court is satisfied that a party to a proceeding has, by any unreasonable act or omission, caused another party to incur costs in connection with the institution or conduct of the proceeding, the Court may order the first mentioned party to pay some or all of those costs.

14    In Cheedy on behalf of the Yindjibarndi People v State of Western Australia (No 2) (2011) 199 FCR 23, the Full Court explained the operation of s 85A of the NTA at [9]:

It is now well established that in proceedings to which s 85A applies:

(1)    s 85A(1) removes the expectation that costs will follow the event, but the Court retains its discretion as to costs under s 43 of the FCA Act;

(2)     the “unreasonable conduct” of the parties is not a jurisdictional fact which pre-conditions the exercise of the discretion, and on the other hand, s 85A(2) does not control or limit the discretion in s 85A(1);

(3)     whilst the exercise of the discretion when making a costs order should be judicial, the starting point is that each party will bear its own costs; and

(4)     it is not proper to use the power to award costs to punish either a successful or an unsuccessful party or as a deterrent to other would-be applicants.

(Citations omitted.)

15    In State of Western Australia v Banjima People [2016] FCAFC 46 at [15], the Full Court described the position of each party to a native title proceeding bearing its own costs under s 85A(1) of the NTA as “the usual position”.

16    In seeking an order for costs against the applicant’s solicitors, the Indigenous respondents rely, in part, upon s 37N(4) of the FCA Act. Section 37M(1) provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. Section 37N(1) requires the parties to a civil proceeding before the Court to conduct the proceeding in a way that is consistent with the overarching purpose, while s 37N(2) requires that in the conduct of a civil proceeding before the Court, a party’s lawyer must take account of and assist the party to comply with that duty. Section 37N(4) requires a Court or Judge to take account of any failure to comply with these duties.

17    In Coulthard v State of South Australia (Adnyamathanha, Ngadjuri and Wilyakali Overlap Claim) [2020] FCA 76, White J accepted at [49] and [80]–[82] that the duty of a lawyer under s 37N(2) of the FCA Act extends to the provision of advice as to whether to commence proceedings. In any event, the discretion under s 43(2) and (3) of the FCA Act allows a lawyer’s failure to give proper consideration to the prospects of success of a proceeding to be taken into account. So, in Levick v Deputy Commissioner of Taxation (2000) 102 FCR 155, the Full Court observed at [44]:

Having said that, it is equally important to uphold the right of a court to order a solicitor to pay costs wasted by the solicitor’s unreasonable conduct of a case. What constitutes unreasonable conduct must depend upon the circumstances of the case; no comprehensive definition is possible. In the context of instituting or maintaining a proceeding or defence, we agree with Goldberg J that unreasonable conduct must be more than acting on behalf of a client who has little or no prospect of success. There must be something akin to abuse of process; that is, using the proceeding for an ulterior purpose or without any, or any proper, consideration of the prospects of success.

18    In Mitry Lawyers v Barnden [2014] FCA 918, Wigney J summarised the principles that apply where a costs order is sought against a lawyer at [42]:

1.    Instituting or maintaining a proceeding on behalf of a client which has no, or substantially no, prospect of success will not, without more, invoke the jurisdiction to make a costs order against a lawyer.

2.    Something which involves “unreasonable conduct” is required.

3.    What constitutes unreasonable conduct will depend on the circumstances of the particular case.

4.    The element of acting unreasonably involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success, with either a recognition that there is no chance of success, or an intention to use the proceeding for an ulterior purpose, or to abuse the processes of the court, or with a disregard of any proper consideration of the prospects of success.

5.    The circumstances must involve or result in a serious dereliction of duty owed to the court, or serious misconduct in promoting the course of, and the proper administration of, justice.

6.    An ulterior purpose or an abuse of process cannot be assumed simply because the case is hopeless.

7.    The reason that the mere pursuit of an unmeritorious case is not so sufficient to invoke the jurisdiction to make a costs order against a lawyer is that a party is entitled to have a practitioner act for him or her in an unmeritorious case. The court is concerned to avoid the risks of a practice developing whereby lawyers endeavour to browbeat their opponents into abandoning clients, or particular issues or arguments, for fear of personal costs orders being made against them.

This passage was adopted in the context of a native title proceeding in Coulthard at [52].

19    QSNTS and the Indigenous respondents submit that the Form 4 compensation application as filed was clearly defective and was bound to be struck out, as was effectively acknowledged by the applicant’s lawyers during the first case management hearing on 6 March 2020.

20    QSNTS also submits that conduct of the applicant’s solicitors in continuing to prosecute the applications after the first case management hearing was unreasonable and demonstrates an absence of any proper consideration of the applicant’s prospects of success. QSNTS submits that the compensation application was filed as part of a deliberate forensic strategy to require the State to identify the compensable acts pursuant to s 83A of the NTA, which should be seen as unreasonable conduct for the purposes of s 85A(2) of the NTA and s 43(3)(f) of the FCA Act.

21    The Indigenous respondents submit that it should be inferred that in filing the defective application, the applicant was acting on the advice of his solicitors. They submit that it was unreasonable for the applicant to not discontinue the proceeding after it was conceded to be defective. They submit that the reason given by the applicant’s solicitors for not discontinuing the proceeding, namely that it would throw away the costs that had already been incurred, was unreasonable.

22    A lawyer against whom a claim for costs is made must have full and sufficient notice of the complaint and a full and sufficient opportunity of answering it: see Mitry Lawyers at [43] and the authorities cited therein. The applicant’s solicitors are plainly aware that costs are sought against them and have had the opportunity of answering the claim. Neither the applicant nor his solicitors have filed affidavits concerning the issue of costs. In the absence of evidence to the contrary, it should be inferred that the Form 4 was completed by the applicant’s solicitors and that the applicant acted upon their advice when providing instructions to file the Form 4.

23    The most obvious defect in the Form 4 was that it failed to identify any compensable act. That failure was inconsistent with the express instruction in Sch I of Form 4 to provide details of the act which was claimed to have extinguished or affected native title rights and interests. It was also inconsistent with s 61(5)(c) of the NTA, which requires that the application contain prescribed information.

24    In my opinion, the conduct of the applicant in filing a patently defective Form 4 compensation application, albeit upon his solicitors’ advice, should be regarded as unreasonable conduct: cf Coulthard at [42]. Further, the conduct of the applicant’s solicitors in advising the applicant to file an application that was patently defective was both unreasonable and unprofessional. The Form 4 plainly failed to comply with s 61(5)(c) of the NTA, and that should have been discernible from even the most rudimentary consideration by the applicant’s solicitors. I infer that the applicant’s solicitors either failed to consider the prospects of success of the application, or they were aware that it had no prospects of success but advised the applicant that it should be filed anyway. The compensation application in that form should never have been made.

25    If the State had maintained its application for orders for costs against the applicant’s solicitors, I would have been inclined to make such orders. However, the position is different in respect of the applications for costs made by QSNTS and the Indigenous respondents.

26    The application to strike out the compensation application was made by the State. It was not until after that application had been filed that QSNTS and the Indigenous respondents became parties.

27    At the first case management hearing, the applicant’s counsel admitted that the Form 4 compensation application was defective, but indicated that it was proposed to apply for leave to amend. The application for leave to amend ultimately failed because I rejected the applicant’s construction of the phrase “not covered by the original application” in s 64(1) of the NTA and the cognate phrase in Form 4. However, it is obvious that the applicant’s construction was reasonably arguable.

28    The applicant also sought that the Court request under s 83A of the NTA that the State Minister and the Native Title Registrar conduct searches, although that application was not ultimately pursued against the Native Title Registrar. It was unnecessary for me to decide the application on its merits, but I accept that it was novel and arguable. The interests of QSNTS and the Indigenous respondents were not directly affected by that application.

29    I consider that the unreasonable conduct of the applicant and his solicitors continued only until the first case management hearing, when they conceded that the compensation application was defective and indicated that the applicant would seek leave to amend. The application for leave to amend was, as I have indicated, reasonably arguable.

30    QSNTS and the Indigenous respondents should not be awarded their costs incurred before they elected to become parties. They did not become parties until after the first case management hearing. The conduct of the applicant and his solicitors after the first case management hearing was not unreasonable.

31    I am not persuaded that the circumstances warrant departure from the usual position under s 85A(1) of the NTA that there should be no order as to the costs of the proceeding.

Associate:    

Dated:    4 May 2021

SCHEDULE OF PARTIES