Muller, Roger v Human Rights & Equal Opportunity Commission & Anor [1997] FCA 634

FEDERAL COURT OF AUSTRALIA COSTS - Whether order should be made under O62A limiting the costs liability of one party only PRACTICE AND PROCEDURE - whether order should be made consolidating proceedings - relevance of liability to pay setting down and hearing fees. Federal Court Rules - O29r5, O62A Federal Court of Australia Regulations - reg 2A, 2AA Maunchest Pty Ltd v John Lindsay Bickford and Ors (Federal Court of Australia, Drummond J, 7 July 1993) Sacks v Permanent Trustee Australia Limited (1993) 45 FCR 509. Woodlands and Anor v Permanent Trustee Company Ltd (1995) 58 FCR 139 Re Ling; Ex parte Ling v Commonwealth (1995) 58 FCR 129 Todd v Jones [1969] VR 169 In the matter of Citizen Limbo (1989) 92 ALR 81 ROGER MULLER v HUMAN RIGHTS & EQUAL OPPORTUNITY COMMISSION & ANOR NG 504 of 1997 MOORE J SYDNEY 17 JULY 1997

IN THE FEDERAL COURT OF AUSTRALIA ) GeneralDistribution ) NEW SOUTH WALES DISTRICT REGISTRY ) NG 504 of 1997 ) GENERAL DIVISION ) BETWEEN: ROGER MULLER Applicant AND: HUMAN RIGHTS & EQUAL OPPORTUNITY COMMISSION First Respondent AND: THE COMMONWEALTH OF AUSTRALIA Second Respondent JUDGE: Moore J PLACE: Sydney DATE: 17 July 1997 MINUTES OF ORDER THE COURT ORDERS THAT: (1) Proceedings NG 504 of 1997 and NG 671 of 1996 be consolidated. (2) Costs in the Notice of Motion be reserved. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA ) General Distribution ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 504 of 1997 ) GENERAL DIVISION ) BETWEEN: ROGER MULLER Applicant AND: HUMAN RIGHTS & EQUAL OPPORTUNITY COMMISSION First Respondent AND: THE COMMONWEALTH OF AUSTRALIA Second Respondent JUDGE: Moore J PLACE: Sydney DATE: 17 July 1997 REASONS FOR JUDGMENT On 17 July 1996, the Human Rights and Equal Opportunity Commission ("the Commission") recommended an award of compensation to Mr Roger Muller of $16,161.20. It did so because it found that Mr Muller had been denied allowances payable to officers of the Department of Foreign Affairs and Trade and that the denial of the allowances was based on Mr Muller's sexual preference. Mr Muller was, at relevant times an officer of the Department, in a stable homosexual relationship and living in London. The Commission found the denial constituted discrimination in employment based on sexual preference. These conclusions flowed, in part, from the construction adopted by the Commission of provisions of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) ("the HREOC Act"). On 15 August 1996 an application was filed by the Commonwealth in this Court seeking judicial review of the decision of the Commission. The impugned decision comprehended the decision that there had been an act or practice that constituted discrimination on the ground of sexual preference and the decision to recommend payment of $16,161.20. The Commonwealth contended the Commission had made a number of errors of law, including misconstruing a determination made under the Public Service Act 1922 (Cth) ("the PS Act"), misconstruing that Act and misconstruing the definition of discrimination in s 3(1) of the HREOC Act. The application filed on 15 August 1996 became matter NG 671 of 1996. The respondents were the Commission and Mr Muller. The first directions hearing was on 12 September 1996 and subsequent directions hearings took place on 29 October 1996 and 11 November 1996. On that last day, hearing dates were fixed for 28 and 29 April 1997, though a further directions hearing was fixed for 4 February 1997. The hearing dates were fixed but further directions hearings were also fixed because attempts were made in late 1996 by those acting for Mr Muller to have the complaint that had resulted in the decision by the Commission under the HREOC Act, also considered under the Sex Discrimination Act 1984 (Cth) ("the SD Act"). It was anticipated the consideration of the complaint under the SD Act might be completed by April 1997. If so, there was a prospect that any further legal issues that arose from the determination of the complaint under the SD Act raised in further proceedings in the Court could be addressed at the April hearing. In due course the hearing dates in April 1997 were vacated as Mr Muller's complaint had not then been determined under the SD Act. The vacation of the hearing dates was opposed by the Commonwealth. The consideration of the complaint under the SD Act resulted in it being dismissed on 29 May 1997. The hearing Commissioner, acting as the Commission, I assume, by virtue of appointment under s 57A of the SD Act, concluded that Mr Muller had not been the subject of discrimination on either the ground of his sex or the ground of his marital status. Both conclusions involved the construction of provisions of the SD Act defining discrimination On 27 June 1997 an application was filed in this Court on Mr Muller's behalf seeking judicial review of the decision of the Commission dismissing the complaint under the SD Act. The respondents were the Commonwealth and the Commission. This application became NG 504 of 1997. It raises the construction of provisions in the SD Act defining discrimination. Both the decision under the HREOC Act and the SD Act concerned the non-payment to Mr Muller of allowances provided for in Determination No 15 of 1983 made under the PS Act. It is not entirely clear from a summary perusal of the reasons given for both decisions whether there was one or a number of allowances involved and whether there had been no payment to Mr Muller or payment at a lower rate. What is clear, however, is that the relevant operation of Determination No 15 of 1983 depended on whether Mr Muller, who was then living overseas, was an accompanied officer which in turn depended on whether he was living with a spouse. That issue was to be considered in the factual context that I earlier noted, namely that Mr Muller was then in a stable homosexual relationship. Central to both the decision under the HREOC Act and the decision under the SD Act was the construction and application of the relevant provisions of Determination No 15 of 1983 and, in relation to each decision, the relevant definition of discrimination. On 27 June 1997 an application was made in NG 504 of 1997 on behalf of Mr Muller by notice of motion seeking the following orders: "1. That, pursuant to Order 29, Rule 5, these proceedings be consolidated with proceedings NG 671/1996 currently before this Court, Commonwealth of Australia and the Human Rights and Equal Opportunity Commission v Roger Muller. 2. That pursuant to Order 62A of the Federal Court Rules, in the event that the Applicant is not successful in this action and costs are awarded against the Applicant, the maximum costs that may be recovered on a party and party basis in these proceedings by the Second Respondent against the Applicant shall be ten dollars ($10.00). 3. Such further or other orders as the Court deems fit. 4. Costs." The application for an order under O62A may be disposed of briefly. Such an order was opposed by the Commonwealth. O62A is framed in terms which indicate that at least its principal purpose is to invest the court with a power to limit at the outset of litigation the potential liability of all parties flowing from a costs order made after proceedings had been heard and determined. In Maunchest Pty Ltd v John Lindsay Bickford and Ors (Federal Court of Australia, Drummond J, 7 July 1993), Drummond J was invited to make an order under O62A limiting the costs recoverable by a dilatory applicant while imposing no limits on the costs recoverable by the remaining respondent, Noosa Hub Pty Ltd. His Honour said: "Counsel for Noosa Hub submits that, in view of the way the applicant has conducted the litigation, which has already caused Mr Bickford and Mr Jefferson to incur unnecessary expense, I should not limit the costs recoverable by Noosa Hub in the action, but should make an order under O62A limiting the applicant's costs. I do not think, however, I have power to do that under the rule which empowers the court to specify "the maximum costs that may be recovered on a party and party basis". There is no indication in O62A that I can accede to the sort of request put on behalf of Noosa Hub. It think that unequal exposure to costs as between parties in a case in which an order under O62A is made must depend upon the court's jurisdiction to order, pursuant to O62A, r2, that one party pay costs beyond those limited by order under rule 1." Some months later Beazley J gave judgment in Sacks v Permanent Trustee Australia Limited (1993) 45 FCR 509. It appears her Honour was not referred to the judgment of Drummond J. Sacks was a solicitor who had acquired units in two property trusts and had unsuccessfully sought to redeem them. He commenced proceedings against the trustee of the trusts and a guarantor of the trustee. Compensation was sought which included an amount to compensate the applicant for his time in preparing and prosecuting the claim. The applicant sought an order under O62A limiting recoverable costs to $6,000 in circumstances where assessments were given by the parties of party and party costs of $40,000 or $30,000. Beazley J refused to make an order under O62A. Her Honour said: "Finally, it is important to bear in mind the intended effect of O62A, r2. The Order is specifically framed so as to inure for the potential benefit of both parties and not only for the benefit of the party bringing the application. The party who actually receives the benefit is the successful party. In this case, whilst the notice of motion is framed in compliance with the provisions of O62A, it seems to me that the applicant is in fact seeking to have the benefit of such an order should he be unsuccessful, but that he does not necessarily propose that the respondents have the same benefit. As I have already stated, the applicant, in his substantive application, has made a claim for compensation for the time and effort which he has expended and will need to expend in the preparation of the proceedings. In addition, he makes a claim for loss of income and opportunity costs. He also makes a claim for costs. He did not argue that his claim for compensation and loss of income and opportunity costs be in any way restricted as he proposes the claim for costs should be. If the applicant wishes to pursue his claim for compensation, he is free to do so. However, in my opinion, he should not have the benefit of a rule designed to treat parties equally, in circumstances where he seeks to expose the opposing party to an unlimited claim for compensation for time and effort expended in the preparation of the proceedings, a great deal of which would, in a case where a solicitor was separately retained to act for the party, in fact be part of the party and party costs in the proceedings. It seems to me that the effect of what the applicant seeks to do is to potentially limit his own liability for the payment of legal costs, yet not give a like benefit to the respondents. For that reason also, I do not consider this to be an appropriate case in which to make an order under O62A." The operation of O62A was further considered by Wilcox J in Woodlands and Anor v Permanent Trustee Company Ltd (1995) 58 FCR 139. A complex of unusual factors appear to have led his Honour to make an order under O62A. Wilcox J was hearing three related proceedings. They concerned housing loans. Two were representative proceedings, the third was not. Each set of applicants had obtained legal aid under the Legal Aid Commission Act 1979 (NSW) ("the NSW Act"). Section 47 of the NSW Act protected legal aid recipients from personal liability for costs. Any costs order against them would be satisfied by the Legal Aid Commission whose liability was capped at $12,500 by the NSW Act. At the time the order was made under O62A, there was an unresolved issue about whether the protection afforded by s 47 had existed in relation to costs orders made under the Federal Court of Australia Act 1976. At that time, that issue and five other preliminary issues had been referred to a Full Court, but had not been head or determined. At the time the various representative proceedings had been commenced in the Federal Court there had been uncertainty about whether the Supreme Court of New South Wales could entertain representative proceedings of the character brought in the Federal Court. Had they been brought in the Supreme Court, s 47 would have clearly applied. Wilcox J made orders under O60A that, as I apprehend their effect, were intended to enable each of the four respondents or groups of respondents with a common interest to recover the maximum that would have been recoverable had s 47 unambiguously applied to the proceedings, namely $12,500, and to recover those costs against the applicants most likely to have access to funds to satisfy any costs order. Importantly, for present purposes, the orders also would also have limited the costs those applicants could have recovered. As to the applications of the other applicants, a limit was imposed under O62A of the nominal amount of $10, again a limit applying to both those applicants and the respondents. His Honour adopted this scheme because the preliminary legal issues, had three proceedings been commenced in the Supreme Court, would most likely to have been determined in one of them only and the maximum costs that would have been recoverable had the respondents succeeded, would have been $12,500. A further factor apparently influencing the course adopted by his Honour was that the proceedings had a public interest element and that applicants, in representative proceedings, should not be dissuaded from prosecuting them because of a potential liability to pay the costs of the respondents if the proceedings failed. It would appear, however, that his Honour rejected the submission referred to at 58 FCR 144 that a figure of $10 be fixed as a maximum amount recoverable as costs in relation to all the proceedings. Making such an order had been conceded by counsel for the applicants as tantamount to making a "no costs" order in advance. In the present case the plain purpose of the proposed order under O62A is to shield Mr Muller from a costs order being made against him while permitting the recovery of costs if an order was made against the Commonwealth. There is clear authority in this Court that O62A is intended to facilitate the making of an order inuring to the benefit of both parties and I can discern nothing in the judgment of Wilcox J in Woodlands that indicates otherwise. It may be in a case such as the present where, in my opinion, there is a public interest element in the issues raised, O62A might be called in aid to effectively make, in advance, a no costs order benefiting both parties. However that is a matter I need not dwell on as that is not the character of the order sought. I do not propose to make the order sought under O62A. I turn now to the question of consolidation. The Commonwealth opposed the consolidation of the proceedings and submitted that they should be heard "back to back" by the same judge, that is, one application heard immediately after the other. Order 29 r5 confers on the Court a broad discretionary power to order that several proceedings be consolidated, heard at the same time or one immediately after another. Though paragraphs (a) and (b) of r5 identify characteristics that might warrant an order under the rule, paragraph (c) is in general terms. In the result, the rule confers a discretion to make an order for consolidation where it is in the interest of justice so to do: see Re Ling; Ex parte Ling v Commonwealth (1995) 58 FCR 129 at 134. The fact that the applicant in one proceeding is a respondent in another does not preclude an order for consolidation: see Todd v Jones [1969] VR 169 and an order identifying which party has the carriage of the consolidated proceedings. In the present case some of the factors that might influence whether an order for consolidation is made, are not present. There is likely to be no real contest about matters of fact in either proceeding. I do not apprehend that facts found by the Commission in the decision leading to NG 671 of 1996 conflict with facts found by the Commission in the decision leading to NG 504 of 1997. As I noted earlier, the decisions turned principally on questions of construction. No issue arises about the representation of parties. If the matters are heard by the one judge, even without an order for consolidation, there is no room for inconsistency of approach in resolving what are separate, though potentially related or similar, legal issues. While different considerations may theoretically arise in relation to costs that might be ordered depending on whether the proceedings are consolidated or not, I anticipate, in practice having regard to the width of the discretionary power to order costs, the consolidation of the proceedings will have no material bearing on how that discretion might be exercised. It is true that the Commonwealth has given Mr Muller an undertaking not to seek costs in NG671 of 1996 if it is successful and gives no such undertaking in relation to consolidated proceedings. However that appears to me to be a matter principally for Mr Muller and those advising him in deciding whether or not to pursue an order for consolidation. The only other practical consequence of ordering consolidation identified in the proceedings appears to be the fees payable under the Federal Court Regulations. I apprehend that one consolidated proceeding will attract one set of setting down and hearing fees under reg 2AA and 2A respectively while, were the proceedings not consolidated, two sets would be payable. A consolidation order should not be made for the purpose of achieving this result. However that it is the result of a consolidation order should not inhibit the making of such an order in appropriate cases. The Commonwealth appears to assume that were the order made in the terms sought by Mr Muller, the Commonwealth would be the applicant in the consolidated proceedings and be liable to pay those fees. If so, Mr Muller would be absolved, in effect, from having to pay them. This, it was submitted, indirectly avoids the provisions in regs 2AA(2) and 2A(2) which identify and limit the circumstances in which fees are not payable by an applicant. This Court does not have a broad discretion to waive the fees, of the type discussed by Brennan J (as he then was) in In the matter of Citizen Limbo (1989) 92 ALR 81. I note, however, that any obligation of the Commonwealth as an applicant in consolidated proceedings, would not be an absolute one and could be modified by an order under regs 2AA(3) and 2A(3) made by the Court, Judge or Judicial Registrar. Moreover, both proceedings raise issues of some importance concerning the construction of Commonwealth legislation arising from decisions of a Commonwealth agency. There is a public interest in their determination. So much is recognised, at least implicitly, by the Commonwealth in giving the undertaking as to costs earlier referred to, and expressly, at earlier directions hearings, when referring to the desirability of having a contradictor in the proceedings NG 671 of 1996 when they came on for hearing. In those circumstances I do not view the possibility of the Commonwealth having to pay setting down or hearing fees in their entirety as a reason for not making an order for consolidation. In my opinion, the proceedings should be consolidated .They raise legal issues that are similar in character by reference to the same substratum of facts. Consolidated proceedings are likely to give rise to greater economy than two hearings heard "back to back" in terms of the documents that will have to be prepared by the parties and read by the Court and the likely time the hearing will take. The costs of this notice of notion should be determined by the judge who hears the consolidated application and are, accordingly, reserved. I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. Associate: Dated: 17 July 1997 Counsel for the Applicant: Ms S Winters Solicitor for the Applicant: Gilbert & Tobin Solicitor for the First Respondent: Mr J Armstrong of the Human Rights and Equal Opportunity Commission Solicitor for the Second Respondent: Mr A Markus of the Australian Government Solicitor