Federal Court of Australia

Faruqi v Hanson (Costs) [2024] FCA 1389

ORDERS

THE COURT ORDERS THAT:

1.    The respondent’s application to vary the costs order made on 1 November 2024 be dismissed with costs.

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

REASONS FOR JUDGMENT

STEWART J:

1    On 1 November 2024, I made orders in the applicant’s favour upholding her claim against the respondent for offensive behaviour because of race, colour or national or ethnic origin under s 18C of the Racial Discrimination Act 1975 (Cth): Faruqi v Hanson [2024] FCA 1264. I made a declaration in relation to the unlawful offensive behaviour and granted a mandatory injunction requiring the respondent to delete the offending tweet.

2    I also ordered that the respondent pay the applicant’s costs, however, I reserved to the parties liberty to apply for a variation of the costs order. The respondent has availed herself of that liberty and applied for an order that the costs be determined on the lower scale of costs applicable as if the proceeding had been brought in Division 2 of the Federal Circuit and Family Court of Australia (FCFCOA) or, failing that, that she be liable for only 50% of the applicant’s costs. These reasons deal with the respondent’s application to vary the costs order.

3    The respondent relies on r 40.08 of the Federal Court Rules 2011 (Cth). That rule provides that a party may apply for an order that any costs payable in the proceeding be reduced by an amount to be specified by the Court if:

(a)     the applicant has claimed a money sum or damages and has been awarded a sum of less than $100 000; or

(b)     the proceeding (including a cross‑claim) could more suitably have been brought in another court or tribunal.

4    It is common ground that if one or other of the circumstances identified in paras (a) and (b) of the rule is established then the Court has a discretion whether or not to exercise the power given by the rule: Umoona Tjutagku Health Service Aboriginal Corporation v Walsh [2019] FCAFC 32; 268 FCR 401 at [57] per White, Perry and Banks-Smith JJ. It has been said that the purpose of r 40.08 “is to penalise parties who, through oversight or incompetence, bring and continue proceedings in an inappropriate Court in the judicial hierarchy. The qualifying factor for the operation of the rule[] is the decision to bring and maintain a case in a particular Court”: Loyola v Cryeng Pty Ltd (No 2) [2012] FCAFC 98 at [15] per Besanko and Perram JJ.

5    As to the circumstance in para (a), the respondent relies on the applicant having sought an order by prayer (e) in her originating application requiring the respondent to pay a financial contribution in the amount of $150,000 to an appropriate not-for-profit or community organisation of the applicant’s choosing, and that I declined to order that relief.

6    There may be some doubt as to whether the circumstance in para (a) is established. Aside from the question whether prayer (e) is in the nature of a claim for “a money sum or damages” within the meaning of r 40.08(a) given that it is in the nature of a discretionary remedy under s 46PO(4) of the Australian Human Rights Commission Act 1986 (Cth) that was not sought for the purpose of compensating the applicant, it may be that para (a) can have no application where other substantive relief is sought and granted. That is because the rationale for the application of the paragraph is that the applicant has been granted relief sounding in money in a sum so small that the proceeding should have been brought in another court. That rationale can have no application where other relief, such as declaratory and injunctive relief, is also sought and granted in the proceeding.

7    That said, I acknowledge that there is Full Court authority to the contrary in relation to the previous equivalent rule of the Court, namely O62 r 36A(l) of the Federal Court Rules 1979 (Cth) (repealed): Shahid v Australasian College of Dermatologists (No 2) [2008] FCAFC 98 at [14] in which Branson, Stone and Jessup JJ decided not to consider whether Australasian Performing Right Association Ltd v Pashalidis [2000] FCA 1815 at [8] per Moore J was wrong without having heard argument on the point.

8    It is not necessary to go further into whether the circumstance in para (a) is established, including whether the authorities under the previous rule are applicable under the differently worded present rule. That is because even on the assumption that the discretion under the rule is enlivened, I would not exercise it to reduce the costs in this case. That is for the following reasons.

9    The most important relief for the applicant was always the declaratory relief that she sought and was granted. That was obvious from the start and it was emphasised in closing submissions. As mentioned, she also sought and was granted a mandatory injunction requiring the respondent to delete the offensive tweet. The applicant was accordingly successful in relation to important substantive relief other than the relief in respect of a monetary sum, and that relief was the most important relief to her.

10    Further, the matter is of considerable importance to the parties. For the applicant, its importance lies in establishing that a particular and common form of egregious behaviour is unlawful, not only for her own protection but also for the protection of others. For the respondent, its importance lies in her constitutional challenge to the validity of s 18C to ensure that she and others can continue to say the sorts of things that I found to be unlawful under s 18C. Thus, for both sides, the case is in the nature of a test case.

11    Indeed, at the first case management hearing in the matter, on 1 June 2023, senior counsel for the respondent indicated that consideration was being given to removing the case to the High Court for the purpose of the constitutional challenge. The respondent briefed two senior counsel and one junior for the trial. At one point I was advised that a leading constitutional law and High Court senior counsel (B Walker SC) had been retained by the respondent and I was asked to accommodate his availability when listing the matter for trial (transcript of 2 February 2024, T10:1-7).

12    The importance of the matter to the respondent, and, from her perspective, for the public interest, is further demonstrated by her public fund-raising campaign for her pending appeal against the judgment. Her campaign material describes the judgment as raising “serious questions about Section 18C and its impact on political expression in Australia”. It states that the respondent “is taking a principled stand to protect our rights to openly discuss issues that matter to Australians” and that “Australians should have the freedom to challenge ideas, defend their values, and express opinions without fear of legal retribution.” The aim is “to raise $1 million to ensure Senator Hanson’s legal team has the resources needed to make the strongest case possible.”

13    It is also to be observed that at trial the respondent submitted that a single judge decision of the Court (Jones v Scully [2002] FCA 1080; 120 FCR 243) and a decision of the Full Court (Toben v Jones [2003] FCAFC 137; 129 FCR 515) are plainly wrong – in respect of the latter, it was a formal submission for the purpose of being able to maintain that position on appeal. See Faruqi v Hanson [2024] FCA 1264 at [309] and [297] respectively. Those submissions illustrate the legal complexity, and controversy, of the matter, although that is also borne out by many other aspects of the case which need not be gone into for present purposes.

14    In those circumstances, it is clear to me that this matter could not more suitably have been brought in the FCFCOA. It was quite appropriately brought in this Court. There is no basis on which it might be concluded that the applicant “through oversight or incompetence” brought and continued the proceeding “in an inappropriate Court in the judicial hierarchy.” The deliberate decision to bring the proceeding in this Court is amply justified.

15    For those reasons I am not moved to exercise the discretion under r 40.08(a) to reduce the respondent’s costs liability. For the same reasons, the circumstance in r 40.08(b) is not established and, even if it were, I would not exercise the discretion in the respondent’s favour.

16    The respondent’s application to vary the costs order made on 1 November 2024 must accordingly be dismissed with costs.

Associate:

Dated:    4 December 2024