Federal Court of Australia

Registrar of Personal Property Securities v Brookfield (No 2) [2024] FCA 175

ORDERS

THE COURT ORDERS THAT:

    The respondent pay the costs of and incidental to the proceeding on a party-party basis to be taxed, if not agreed.

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

REASONS FOR JUDGMENT

SARAH C DERRINGTON J

1    On 30 January 2024, judgment was delivered in favour of the Registrar: Registrar of Personal Property Securities v Brookfield [2024] FCA 29. The Court ordered that the matter be listed for hearing on the question of costs on a date to be advised administratively.

2    For reasons that are explained below, the matter was ultimately determined on the papers. The Registrar provided submissions on 15 February 2024. On 18 February 2024, Mr Brookfield sent an email to the Queensland Registry of the Federal Court, objecting to the determination of costs pending the outcome of an apparent investigation into the Registrar’s conduct by the Administrative Appeals Tribunal (AAT), and pending the outcome of his appeal from the decision on 30 January 2024.

3    For the reasons that follow, Mr Brookfield must pay the costs of the Registrar on a party-party basis.

GENERAL PRINCIPLES

4    The purpose of a costs order is to compensate, not punish an unsuccessful party: Gain Capital UK Ltd v Citigroup Inc (No 2) [2016] FCA 243 at [37], quoting King v Yurisich (No 2) [2007] FCAFC 51 at [19]. Section 43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) confers broad discretion on the Court to award costs in all proceedings: El-Debel v Micheletto (in his capacity as joint and several trustee in bankruptcy of the estate of El-Debel) (No 2) [2021] FCAFC 146 at [2]. That discretion is unconfined but, while generally exercised in favour of the successful party (Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 243 CLR 52 at [25]), it:

must be exercised judicially, … according to relevant considerations and taking

account of the contextual features and facts of the litigation.

(Citations omitted. Emphasis added.)

5    Sections 37M and 37N of the FCA Act require parties to conduct themselves in accordance with the overarching purpose of the FCA Act:

37M The overarching purpose of civil practice and procedure provisions

(1)     The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:

(a)    according to law; and

(b)    as quickly, inexpensively and efficiently as possible.

…

    37N Parties to act consistently with the overarching purpose

(1)    The parties to a civil proceeding before the Court must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.

…

(4)    In exercising the discretion to award costs in a civil proceeding, the Court or a Judge must take account of any failure to comply with the duty imposed by subsection (1) …

6    Section 37N(4) makes it clear that the Court must take into account a party’s failure to comply with its obligations under s 37N(1) in the exercise of the Court’s discretion as to costs: Basetec Services Pty Ltd v Leighton Contractors Pty Ltd (No 8) [2017] FCA 258 at [83]. The Court is given an express power by s 43(3)(g) of the FCA Act to order that costs awarded against a party are to be assessed on an indemnity basis.

ASSESSMENT OF COSTS

7    The Registrar has sought an award of party-party costs. Rule 40.1 of the Federal Court Rules 2011 (Cth) allows for an award of party-party costs that are “fair and reasonably incurred”. The Registrar has submitted that, but for one point – which I understand to be no more than an innocuous factual misstatement about the period of Mr Brookfield’s contravention of s 151(2) of the Personal Property Securities Act 2009 (Cth) – the Registrar’s case was wholly successful.

8    Despite his primary submission, the Registrar submits that it would be open to the Court to award costs in his favour on an indemnity basis.

9    In these proceedings, Mr Brookfield was self-represented. It is uncontentious that this factor does not abrogate the Court’s discretion to, at least, order that costs follow the event. As was observed by Kenny J in Ogawa v University of Melbourne (No 2) [2004] FCA 1275 at [42]:

… a court … [has] to make allowances for the position of litigants in person, and to try to ensure that such a litigant does not lose out because of lack of expertise; although there is a limit to what the Court can do in that regard, while still remaining an impartial determinant of a dispute. … litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made, and through making proceedings much longer and much more expensive than they would otherwise be, by not focusing accurately on the real issues in the case. Conduct of that nature by legally represented parties would often lead to orders for indemnity costs. Litigants in person may escape the consequence of indemnity costs, but I do not think that the circumstance that a party is a litigant in person is a ground for displacing the ordinary result that costs follow the event.

(Emphasis added.)

10    As submitted by the Registrar, although self-represented, Mr Brookfield has engaged in a pattern of uncooperative conduct throughout the proceedings that delayed their resolution and created various inefficiencies. The following matters are illustrative of that pattern of conduct.

(a)    Conduct in relation to timetabling: Mr Brookfield did not file a concise statement in response by 1 September 2023, as required by paragraph 2 of the Orders dated 14 July 2023. Mr Brookfield did not file and serve his evidence in chief to be relied on at trial by 15 September 2023, as required by paragraph 5 of Orders dated 3 July 2023. By his submissions dated 11 December 2023, he elected not to provide written submissions nor a list of authorities in advance of the hearing, in breach of paragraph 4(a) and (b) of the Orders dated 3 November 2023.

(b)    Conduct in respect of interlocutory applications: Mr Brookfield filed an interlocutory application, impugning the conduct of the Registrar’s legal representatives, and, during the hearing of that application on 18 December 2023, abandoned it, in circumstances where the Registrar had prepared written and oral submissions in reply. He later sought leave of the Court to appeal Orders dismissing an interlocutory application filed by him on 1 November 2023 seeking a stay of proceedings, which was filed out of time and served on the Registrar in unsealed format.

(c)    Conduct during the hearing: At the hearing, Mr Brookfield engaged in irrelevant and inadmissible questioning of the Registrar’s witness during cross-examination.

(d)    Conduct in respect of determining costs:

(i)    On 30 January 2024, having been notified of an arithmetical error in the judgment that was to be corrected under the slip rule, Mr Brookfield wrote to my Associate in the following terms:

In response to this erroneous judgement,

It will obviously be going to appeal so applying the slip rule to correct a basic mathematical calculation is a moot point.

In addition and in order to save the courts time and allocation, the issue of costs should be reserved pending the outcome of a Full Court Appeal.

(ii)    On being notified by email on 1 February 2024 that I would hear the costs argument at 10.00am on Thursday 8 February 2024, Mr Brookfield wrote to the Registry on 1 February 2024 in the following terms:

Please be advised that the date and time proposed is not suitable.

Having recently been assaulted whilst feeding the homeless again and suffering from concussion I will not be engaging in any court process.

Police incident number; QPXXXXXXXXXX

(iii)    On 2 February 20204, Mr Brookfield was asked to provide the Court with an affidavit attaching appropriate medical evidence to corroborate his position.

(iv)    On 4 February 2024, Mr Brookfield responded:

As to injuries sustained, they are as follows;

Concussion, strained shoulder, split to ear and blurred vision.

My doctor will happily confirm this in his medical report this week.

(v)    On 5 February 2024, the Registry reminded Mr Brookfield of his need to file an affidavit. Mr Brookfield replied the same day stating that his “treating doctor will making a report available later this week”. No affidavit was ever filed.

(vi)    Nevertheless, on 6 February 2024, the Registry advised the parties that, to better accommodate both parties’ availability, the Court was minded to list the hearing on costs at 9.30am on 15 February 2024. That date still did not suit Mr Brookfield because he had a Supreme Court hearing listed for 13 February 2024 and wished the matter to be listed on the same date to avoid his needing to travel again to Brisbane on 15 February 2024.

(vii)    After several email messages between the parties and the Registry, the parties were informed on 7 February 2024 that the matter was listed at 9.15 am on 15 February 2024 via Microsoft Teams. This avoided Mr Brookfield’s need to come to Brisbane twice in the same week.

(viii)    Mr Brookfield responded on 7 February 2024 that he would not be available “post 13 February so will be unable to attend [the] proposed date”. He requested “the 5 weeks adjournment as requested”. That appeared to be a reference to the Registrar’s counsel indication that she would be commencing a 5-week hearing on 12 February 2024. The Registrar had indicated Counsel could, however, be available at 9.15am on the date proposed.

11    Given Mr Brookfield’s attitude to attending a hearing, I requested that the parties file written submissions regarding costs (not exceeding 3 pages in length) by 4.00pm on 15 February 2024 and indicated that I would determine the matter on the papers. The Registrar complied with that request. Mr Brookfield did not.

12    By email to the Registry dated 18 February 2024, Mr Brookfield stated that he “[did] not intend to participate in the assessment of a costs order” at this time, on the basis that it was “premature”. He maintains that there is an ongoing investigation into the Registrar’s conduct in respect of the proceeding by the AAT. As I understand the matter, that is in fact an application for judicial review, lodged significantly out of time on 31 October 2023, of the Registrar’s decisions, which were the subject of the primary judgment. Further, the prospect of an appeal from that judgment is not a sufficient reason to delay the determination of costs orders in respect of a matter which has been otherwise finalised: Telstra Corporation Ltd v Phone Directories Company Pty Ltd (No 3) [2014] FCA 949 at [31], [39]-[40].

13    In all the circumstances, it is difficult to see how Mr Brookfield can be said to have acted consistently with the overarching purpose under s 37M(1). While – by his affidavit filed 3 November 2023 – he demonstrated an attempt to, at least, narrow his understanding of the issues in dispute, he has come very close to the line of triggering the power in s 43(3)(g) of the FCA Act. Nevertheless, there has not been a total failure to comply with s 37M(1), nor a failure by analogy to the applicant in Ogawa.

DISPOSITION

14    For the reasons above, being the ‘contextual features’ of this litigation, but having accounted still for Mr Brookfield’s failures to observe s 37M(1), I do not consider that an order for indemnity costs is appropriate against Mr Brookfield on this occasion. Consequently, the order will be that Mr Brookfield pay the Registrar’s costs to be taxed, if not agreed.

Associate:    

Dated:        4 March 2024