Federal Court of Australia

Scholes v Commonwealth of Australia [2022] FCA 27

ORDERS

THE COURT ORDERS THAT:

1.    Without derogating from the Respondent’s entitlement to enforce the orders made by consent by the Court on 23 March 2020 the Applicant shall pay the Respondent’s costs of the proceeding (including any costs thrown away by reason of the Respondent providing arrangements for the Applicant to call witnesses in Nigeria) other than the costs of the trial on 5-8 October 2021.

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

REASONS FOR JUDGMENT

KERR J:

1    On 17 December 2021 the Court published reasons in Scholes v Commonwealth of Australia [2021] FCA 1593 (the Decision). The Court ordered:

1.    The Applicant's application be dismissed.

2.    Unless either party advises the Court by no later than 14 January 2022 that they would seek an alternative order, the Applicant shall pay the Respondent’s costs of the proceeding (including any costs thrown away by reason of the Respondent providing arrangements for the Applicant to call witnesses in Nigeria) other than the costs of the trial on 5-8 October 2021.

3.    If either party seeks an alternative order as is provided for in Order 2 the parties shall have until no later than 4:00pm 21 January 2022 to file and serve any written submissions (limited to 3 pages) upon which they may seek to rely in relation to costs.

4.    Unless the Court otherwise orders any question of costs so arising be determined on the papers.

2    On 10 January 2022 the Applicant, Mr Scholes, lodged a Notice of Appeal of the Decision with the Federal Court.

3    On 11 January 2022, the Applicant provided his appeal documents with a covering letter by email to the Associate to Kerr J and to the solicitor for the Respondent. The Respondent, the Commonwealth, responded to that correspondence on 14 January 2022, coping in the Applicant, and identified that the Applicant had made submissions as to costs pursuant to Order 2 of the 17 December 2021 orders within the appeal documents. The Commonwealth notified the Court that:

…without conceding the bases identified by the Court at paragraph 294 of the Reasons, the Commonwealth advises that it does not propose to seek an alternative costs order to that proposed by the Court.

The Commonwealth will provide its written submissions in response to Mr Scholes’ submissions on the issue of costs, by 4pm 21 January 2022, in accordance with order 3 of the Orders.

4    The Commonwealth filed its submissions on 21 January 2022 as foreshadowed.

The Applicant’s Submissions

5    The Applicant submits that the Court is aware that he “does not have nor will ever have the financial ability to pay for the respondents costs” and that enforcement of the Court’s orders will force him into “seeking immediate bankruptcy” and that he will have then “lost everything”.

6    The Applicant submits that he pursued his case “…in the public interest and in the public good believing that his version of the events that occurred in Nigeria on 6-10 December 2017 which are true and correct as the applicant lived and experienced them.” He submits that he realises that he will never see his fiancée and her children again or ever fully recover from the events that were the subject of this proceeding.

7    The Applicant, in his costs submissions, continues to assert the untruthfulness of witnesses whose honesty the Court accepted in its reasons. The Applicant also asserts that certain documentary evidence was withheld by the Commonwealth.

8    The Applicant notes a costs order made earlier in the proceeding:

7.    The applicant draws His Honour’s attention to the 23 March 2020 court order granting party-party costs reiterating the applicant as then and as now will never have the financial ability to pay the cost orders against him. Therefore the applicant seeks that the 23 March 2020 court orders stand and remain force. (See attached documents)

That order, as was made by consent, is that:

7. The Applicant pay the First Respondent’s costs:

a. of the Commonwealth’s Application; and

b. that have been thrown away as a result of the filing of the Further Amended Statement of Claim;

such costs to be paid on a party-party basis, to be taxed in default of agreement and to otherwise be stayed until the determination or resolution of the proceedings.

9    The “Commonwealth’s Application” as referred to above was an interlocutory application dated 21 February 2020 wherein the Commonwealth sought orders that leave be refused to the Applicant to join the Department of Home Affairs and the Commonwealth Ombudsman to the proceedings. The Commonwealth also sought that the Department of Foreign Affairs and Trade and the Australian Federal Police be removed as parties. The Commonwealth applied for the proceeding to be summarily dismissed and the Applicant’s Amended Statement of Claim be struck out. The Commonwealth’s application was later withdrawn with agreement that the Applicant could re-plead but subject to the costs order referred to above. There is no reason why that costs order should be derogated from. However that it was made has no bearing on the disposition of the costs of the balance of the proceeding.

10    The Applicant concludes his submissions as follows:

21.    With all due respect, the applicant sekes court orders pursuant Federal Court Division Rule 40.4 Determination of maximum costs; 40.51 Maximum costs in a proceeding

(2)    An order made under subrule (1) will not include an amount that a party is ordered to pay because the party:

(d)    has not conducted the proceeding in a manner that to facilitate a just resolution as quickly, inexpensively and as efficiently as possible, and that the other party has been called to incur the cost as a result.

The Commonwealth’s Submissions

11    On 21 January 2022, the Commonwealth filed submissions. The Commonwealth does not seek an alternative costs order and objects to the alternative order sought by the Applicant.

12    The Commonwealth observes that, “the ordinary costs consequence is that while there is “no absolute rule” generally the discretion to award costs is to be exercised in favour of a successful party.” The Commonwealth submits that there is no basis to depart from the Court’s proposed costs order:

5.     In circumstances where Mr Scholes’ allegations against the Commonwealth and particular Commonwealth officers were rejected by the Court, and the evidence of the Commonwealth’s witnesses was uniformly preferred where Mr Scholes evidence differed from it on all critical issues, and where his case was dismissed, the Commonwealth’s submission is that there is no basis for accepting Mr Scholes’ submission that the Court depart from the Proposed Costs Order.

6.     This position is reinforced in the present case where Mr Scholes agitated serious allegations, none of which were substantiated, against the Commonwealth and its officers including that he had been falsely imprisoned and deprived of his liberty by “criminal/tortious acts/actions and/or omissions”, that the Commonwealth had engaged in official corruption and fraudulent behaviour and “half-truths, blatant lies, fabricated evidence/conversations and/or parts thereof, misquoting/taking out of context the applicant’s correspondence, and misinformation leading to the withholding of evidence prejudicial to the respondent’s case” and that the Commonwealth had breached Nigerian Criminal Code, Australian Criminal Law. These allegations included harsh personal allegations against Commonwealth officers, especially the Deputy Head of Mission, Ms Cleo Wilson, who the Court accepted had acted in Mr Scholes’ interests and with his consent in arranging for his transfer to safety in Lagos from the potential danger of Ilero.

7.     The appropriateness of the Proposed Costs Order is further reinforced by the fact that during his closing submissions, after questions from the Court, Mr Scholes conceded a significant part of his case, being that part of his false imprisonment claim for nearly two days after he had received his passport, credit card and money in Lagos.

13    The Commonwealth further submits that this is not a case which warrants a departure from the usual course. It would be premature to make a determination regarding the Applicant’s ability to meet any costs order; this matter does not raise relevant public interest considerations; and the Applicant’s criticism of the Commonwealth’s conduct of the litigation “does not bear scrutiny” in circumstances where the Commonwealth displayed determination to ensure that the Applicant was able to properly present his case notwithstanding his lack of legal training and limited financial resources. The Commonwealth rejects that it withheld documentary evidence from the Applicant during the trial, and that its witnesses were untruthful.

14    As regards the two bases which the Court relied on in excluding the costs of the trial, the Commonwealth respectfully records in its submissions that it did not concede those bases although maintains that it accepts the Court’s orders:

8.     …

(c)     …

(i)     the “unfortunate event” identified at [291] of the Reasons ought not be attributed to the Commonwealth and, further or alternatively, it ought not be taken into account in relation to costs, in circumstances what the interruption to the proceeding was unintended and inadvertent, what was said was said without instructions and an unreserved apology was given and accepted by the Court; and

(ii)     the Commonwealth’s cross-examination of Mr Scholes was proper and provided the forensic context for the Commonwealth to not need to seek a finding that Mr Scholes had deliberately given false evidence, as a necessary pre-condition to challenging his reliability, and that the Commonwealth conducted the trial in compliance with its obligations as a model litigant.

15    Responding to paragraph 21 of the Applicant’s submissions, the Commonwealth submits:

(e)     Rule 40.51(1) of the Rules contemplates an order for maximum costs, but none is sought. Mr Scholes’ reliance on an exception to that rule – r 40.51(2)(d) – in support of his costs submissions misconstrues the framework of the Rules, and, in any case, does not support any alternative order. Any concern is as to the quantum of any costs, the Court’s taxation processes will ensure any such quantum is appropriately calculated.

Consideration

16    The Commonwealth does not seek an alternative order to the Court’s costs order but notes that it “does not concede the two bases upon which the Court relied in excluding the costs of the trial”. The two bases referred to are the unfortunate event identified at [291] of the Court’s reasons where it refers to an unfortunate event involving “significant and cruel mockery of Mr Scholes” as he was attempting to cross-examine a witness; and the extensive cross-examination of the Applicant which the Court considered could not have served “as a sound foundation for the Commonwealth’s submission that Mr Scholes’ conduct warranted an adverse conclusion to be drawn as to his general credit.”

17    However aside from those two issues, the Court is satisfied that the Commonwealth conducted the litigation in this proceeding in a manner which does not disentitle it to its prima facie entitlement to its costs.

18    The Commonwealth did not ultimately press its presumptive entitlement to strike out the Applicant’s earlier manifestly challenging pleadings. It cooperated in reaching agreement with the Applicant to an agreed list of issues for the trial to be conducted. The Commonwealth was also prepared and did put in place arrangements to facilitate the Applicant’s witnesses resident in Nigeria to give evidence at trial. That those witnesses did not present to give evidence does not diminish the Court’s appreciation of the extra lengths that the Commonwealth was prepared to go to enable the Applicant to advance his case. Nothing in those regards was inconsistent with the Commonwealth’s duty as a model litigant.

19    The Court is not unsympathetic to the personal position of the Applicant. As the reasons in the principal judgment indicate I accept that the Applicant suffered extreme stress following his kidnapping and later came to believe firmly that the circumstances of his return from Ilero to Lagos were those that he gave truthful evidence of. As the Court noted at [217]:

…I am satisfied Mr Scholes gave evidence in this proceeding consistently with the truth as he recalled it. However that a witness believes his or her evidence is the truth does not compel a finding that the facts are as that witness recalls.

20    Nonetheless it is self-evident that the Applicant persisted in advancing contentions the Court has regarded as implausible notwithstanding that in the course of this litigation he was on notice not only with respect to the sworn statements of a number of Commonwealth officials but also of contemporaneous documents of the Department of Foreign Affairs and Trade that should have revealed to him that his memory recall might not be accepted by the Court as the truth of those circumstances.

21    The Court acknowledges that the Applicant maintains in his costs submissions that the Commonwealth’s witnesses should have been found to be untruthful and that certain documents were withheld. Those submissions cannot be relied on in relation to the question of costs in a proceeding the Court has determined. If the Court is in error in those regards that will be dealt with on the appeal.

22    The Applicant was fully entitled to press his case but having raised very serious allegations against the Commonwealth and its agencies and officers, determinately pressed that case and having lost there is not a sound basis not to follow the normal course as submitted for by the Commonwealth that costs follow the event. I have taken the Applicant’s relative impecuniosity into account as it does not seem to be in dispute but impecuniosity of an unsuccessful party in litigation is not per se a disentitling factor. In the present case I do not regard it as standing in the way of the Commonwealth asserting its prima facie entitlement and having that entitlement recognised. I am reinforced in that conclusion by reason of the Applicant having only abandoned significant parts of his claims after their implausibility became so self-evident in the course of the trial that no other course was open.

23    The Applicant refers to r 40.51(2)(d) of the Federal Court Rules 2011 (Cth) in support of his submissions. That is a prophylactic rule which permits a party that anticipates that failure in a substantive proceeding may expose them to unwarranted costs to seek the benefit of an order limiting their potential exposure. No such order was sought or made in this proceeding. If the Applicant is contending that at this point of time such an order should be made I reject that that is an appropriate course.

24    For completeness, I indicate that I reject that the Applicant’s litigation is capable of characterisation as public interest litigation as has been recognised as a basis for declining to award costs against a losing party. It was litigation pursued seeking damages in respect of a private claim for false imprisonment. It involved no element of vindication of a larger public right: see Wilderness Society v Turnbull [2007] FCA 1863 per Marshall J at [30].

25    The Court therefore accepts the Commonwealth’s submission that it is entitled to an order for its costs and that whether any such order should or will be enforced is a question for it rather than for the Court. However in that regard the Court draws attention to its findings that the Applicant suffered extensively from the trauma of his kidnapping and its aftermath. It appears uncontentious that he has lost any prospect of being reunited with his fiancé in Australia and at all unless he is willing to return to Nigeria which given his past experiences it would be understandable if he was reluctant to do so. The Court also draws attention to its findings that the Applicant’s certitude as to his memory involved no dishonesty on his part and is consistent with his having come to believe firmly in the facts that he asserted in this proceeding.

26    For the above reasons the Court is satisfied that it is not appropriate to make an alternative order to that proposed on 17 December 2021. It will order accordingly. For the removal of doubt, the Applicant having referred to the Court’s order made by consent on 23 March 2020, the costs orders I shall make will specify that nothing derogates from the Commonwealth’s existing entitlements in that regard.

Associate:

Dated:    25 January 2022