Federal Court of Australia

Lingard v Commonwealth Bank Officers Superannuation Corporation Pty Limited (No 2) [2024] FCA 536

ORDERS

THE COURT ORDERS THAT:

    The applicant pay the second, third and fourth respondents’ costs of the appeal to be taxed, if not agreed, on the standard basis.

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

REASONS FOR JUDGMENT

SARAH C DERRINGTON J

INTRODUCTION

1    On 4 March 2024, judgment was delivered in Lingard v Commonwealth Bank Officers Superannuation Corporation Pty Limited [2024] FCA 174 (Lingard (No 1)), dismissing the appeal of Ms Hayley Elizabeth Lingard, the applicant or – more correctly – the appellant, against a decision of the Australian Financial Complaints Authority (AFCA) (the second respondent). AFCA, and Ms Stephanie Jade Ogden (the third respondent) and Mr Benjamin Thomas Ogden (the fourth respondent) (the Ogdens), seek an order for costs on the standard basis. The Commonwealth Bank Officers Superannuation Corporation Pty Limited as trustee for Commonwealth Bank Group Super (the first respondent) filed a submitting notice, which indicated they sought to be heard on the question of costs, but in the end, filed no submissions.

2    On 14 March 2024, the Ogdens filed submissions in accordance with Order 2 of the Orders made on 4 March 2024. On 17 March 2024, Ms Lingard filed submissions in response. AFCA did not file any submissions further to those made at the hearing.

3    For the reasons that follow, it is appropriate that Ms Lingard pay the costs of AFCA and the Ogdens on the standard basis.

RELEVANT LEGAL PRINCIPLES

4    The purpose of an order for costs 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] (emphasis added).

5    Section 43 of the Federal Court of Australia Act 1976 (Cth) 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]. Such discretion is not confined, however – while it is generally exercised in favour of the successful party (Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; 243 CLR 52 at [25]; Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [67]) – it also:

must be exercised judicially, … according to relevant considerations and taking account of the contextual features and facts of the litigation.

THE PRESENT CASE

6    The Ogdens submitted that the Court’s assessment of the relevant considerations in respect of a costs award, and its account of the contextual features of the litigation, point to a standard award of costs in their favour. They rely on the following matters in support of that submission, each of which I accept as factors relevant to the exercise of the Court’s discretion to award costs in this case:

(a)    whether the conduct of the successful party is such to disentitle the beneficial exercise of the Court’s discretion to award costs: Anglo-Cyprian Trade Agencies Ltd v Pahpos Wine Industries Ltd [1951] 1 All ER 873 at 874;

(b)    whether the success of the party is mixed: El-Debel; and

(c)    that one party was unrepresented: Bhagat v Royal and Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159, cited with approval in Hamilton v Meta Platforms Inc. (Costs) [2023] FCA 1496.

7    Ms Lingard’s submissions are coloured by the fact that she does not accept the finding below. She submitted that the Ogdens should bear “some considerable responsibility for their own costs … particularly given they have gained a significant financial windfall, that was never intended to be theirs” (emphasis added). Ms Lindgard also submitted that, failing an order that the Ogdens bear their own costs, any award of costs should represent no more than 60% of their costs incurred in the proceedings. By her submissions, Ms Lingard relied on the following assertions as “relevant factors” which – she contended – support a conclusion that the Ogdens should not be entitled to any costs award:

(a)    the Ogdens have not disclosed the costs sought against Ms Lingard, such that “it is impossible for [her] … to respond to the fairness and reasonableness” of those costs;

(b)    the Ogdens were not unfamiliar with a significant volume of the information before the Court in this proceeding, which should amount to “considerably less” costs sought;

(c)    Ms Lingard “made every possible effort” to “reduce the impact of potential expense and hardship” on the respondents;

(d)    the Ogdens independently engaged private legal representation;

(e)    Ms Lingard identified at least one error of law, notwithstanding her lack of success; and

(f)    the issues in dispute “explicitly link to the behaviour/conduct of the Respondent parties” and as such, “a good deal of responsibility for the protraction and conflict regarding this matter is a primary result of the false and misleading information knowingly submitted by the Respondent parties and their associated poor conduct”.

8    Ms Lingard also sought to re-argue her complaint made at trial that AFCA deviated from its Operational Guidelines. That complaint was disposed of at trial and is not a factor to be considered in the Court’s exercise of discretion to award costs.

ASSESSMENT OF COSTS

9    In Anglo-Cyprian, Devlin J set out the relevant test for when a successful party would disentitle itself “to the beneficial exercise of the discretion”: Oshlack at [69]. His Honour said, at 874:

No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct.

10    As the High Court explained in Oshlack at [69], citing Devlin J in Anglo-Cyprian at 874, “misconduct” in this context refers to “misconduct relating to the litigation, or the circumstances leading up to the litigation”. Established examples of such conduct by a successful party include the following (Oshlack at [69]):

•    by its lax conduct, effectively invites the litigation;

•    unnecessarily protracts the proceedings;

•    succeeds on a point not argued before a lower court;

•    prosecutes the matter solely for the purpose of increasing the costs recoverable; or

•    obtains relief which the unsuccessful party had already offered in settlement of the dispute.

(Footnotes omitted.)

11    Contrary to Ms Lingard’s submissions, nothing in the conduct of AFCA or the Ogdens reveals any disentitling behaviour. Although Ms Lingard continues to assert that “key issues of this case explicitly link to the behaviour/conduct of the Respondent parties” and therefore, “a good deal of responsibility for the protraction and conflict regarding this matter is a primary result” of their conduct, those issues were matters decided by AFCA within the limits of its decisional freedom, as was determined in Lingard (No 1). Again, these matters cannot be re-litigated on a hearing as to costs. Further, the Ogdens’ role in Lingard (No 1) was defensive, in circumstances where – having successfully challenged Ms Lingard’s eligibility under the relevant death benefit nomination – they sought no further relief against Ms Lingard. They were subsequently ordered to be joined to the proceedings because their substantive interests were affected by Ms Lingard’s appeal from her unsuccessful challenge to the AFCA decision. They were, therefore, “put to the expense of participating” in the proceedings. Nonetheless, the Ogdens participated in a timely and appropriate manner once joined. Their conduct cannot be construed as lax, unnecessarily protractive, or otherwise disentitling.

12    Ms Lingard submitted that she has not been provided with sufficient financial information by the Ogdens, and that as a result, she cannot effectively “respond to the fairness and reasonableness” of the costs sought. The actual quantum of the costs recoverable following an order of the Court that one party pay another’s costs is determined either after a taxation of those costs, or an award of a lump sum. There is no application for the payment of a lump sum in the present case. The purpose of the orders now sought by AFCA and the Ogdens is to determine whether or not they are entitled to their costs and, if so, whether those costs are to be assessed on a standard basis, or on an indemnity basis. I note, however, that neither AFCA nor the Ogdens have sought an award on an indemnity basis.

13    The Ogdens have submitted that, as Ms Lingard was wholly unsuccessful in Lingard (No 1), there is no reason why the Court should depart from the standard approach to awarding costs: Oshlack at [67]. They pointed in particular to the following findings in the judgment:

•    “The Second Amended Notice of Appeal is manifestly deficient and defective”;

•    “Ms Lingard has not established that there was no evidence before AFCA upon which its conclusion could properly be based”;

•    “There is no basis for Ms Lingard’s assertion that AFCA failed to take into account a relevant consideration …”;

•    “There is no basis for Ms Lingard’s complaint that AFCA erred in law by failing to take into account relevant considerations”;

•    “The reasoning applicable to the decision in the case was based on specific statutory provisions not replicated in the SIS Act. It is of no assistance in this case”;

•    “Ms Lingard has not established that no reasonable person could reach the same conclusion”;

•    “There was no evidence that AFCA was privy to the advice and, to the extent that the errors were reflected in the Second and Third Decisions, they too were immaterial by the point that AFCA had undertaken its de novo review”;

•    “Further, there is not a scintilla of evidence that Ms Purcell was in any way involved in the AFCA Recommendation or the AFCA decision”; and

•    “No bias, actual or apprehended, on the part of AFCA has been established”.

14    The Ogdens quite properly acknowledged that Ms Lingard was unrepresented in Lingard (No 1), and in respect of her submissions on costs. It is not controversial that this factor does not nullify the Court’s discretion to, at least, order that costs follow the event. So much was explained 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.)

15    Despite the absence of legal representation, and as I stated in Lingard (No 1) (at [28]), Ms Lingard did undertake a serious attempt to plead her case in cogent terms, and the Court was able to discern “two fundamental bases” on which she challenged the AFCA decision (at [30]), such that the objections to the competency of her appeal, filed by AFCA and the Ogdens on 7 November 2023 and 15 November 2023 respectively, were dismissed. Ultimately, Ms Lingard was not prevented from receiving a full hearing of her appeal, despite being self-represented.

16    Ms Lingard also submitted that any costs order in favour of the Ogdens should be reduced by 40% on the basis that they must have been aware of a substantial volume of the relevant information before the Court prior to the proceedings, and therefore, any costs sought should be “considerably less” than if the information was unfamiliar. Whether or not the Ogdens were familiar with the information is one thing; whether their legal representatives were similarly familiar is quite another – and it is unlikely to be so. In any event, no evidence was adduced to support this contention.

DISPOSITION

17    In all the circumstances, I am not persuaded that there are any contextual features which displace the prima facie rule that a wholly unsuccessful party should pay the costs of a successful party. There is no basis why costs should not follow the event in this case.

18    There will be an order that Ms Lingard pay the costs of AFCA and the Ogdens, to be taxed, if not agreed, on the standard basis.

19    No order for costs will be made in respect of the first respondent.

Associate:    

Dated:        23 May 2024

SCHEDULE OF PARTIES

QUD 388 of 2022