FEDERAL COURT OF AUSTRALIA G S Technology Pty Ltd v Secretary of the Copyright Tribunal [1999] FCA 1189 ADMINISTRATIVE LAW - decision of Secretary of Copyright Tribunal taxing costs - application for review of Secretary's decision - constitutional validity of s 174(1A) of Copyright Act 1968 (Cth) - whether conferral of judicial power on Secretary Copyright Act 1968 (Cth) s 174(1A) G S TECHNOLOGY PTY LTD v THE SECRETARY OF THE COPYRIGHT TRIBUNAL & ORS Q 120 of 1999 WHITLAM, LINDGREN, DOWSETT JJ 26 AUGUST 1999 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY Q 120 OF 1999 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: G S TECHNOLOGY PTY LTD Appellant AND: THE SECRETARY OF THE COPYRIGHT TRIBUNAL First Respondent THE STATE OF QUEENSLAND Second Respondent THE ATTORNEY-GENERAL OF THE COMMONWEALTH Intervener JUDGE: WHITLAM, LINDGREN, DOWSETT JJ DATE OF ORDER: 26 AUGUST 1999 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the costs of the first and second respondents of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY Q 120 OF 1999 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: G S TECHNOLOGY PTY LTD Appellant AND: THE SECRETARY OF THE COPYRIGHT TRIBUNAL First Respondent THE STATE OF QUEENSLAND Second Respondent THE ATTORNEY-GENERAL OF THE COMMONWEALTH Intervener JUDGE: WHITLAM, LINDGREN, DOWSETT JJ DATE: 26 AUGUST 1999 PLACE: BRISBANE REASONS FOR JUDGMENT (ex tempore) THE COURT: INTRODUCTION 1 The Appellant ("GST") appeals from a decision of a judge of the Court (Cooper J) dismissing an application by GST for review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act"). 2 The amended application filed on 14 May 1998, like the original application filed on 24 December 1997, had identified the decision impugned as a decision of the Secretary of the Copyright Tribunal ("the Secretary" and "the Tribunal" respectively) to tax and allow costs against GST in a sum of $18,059.70 evidenced by a certificate of taxation dated 2 December 1997 in File CT 2 of 1996 on a reference under s 183 of the Copyright Act 1968 (Cth) ("the Act"). The primary judge noted that after interlocutory applications, the decisions for review were identified as the decision of the Tribunal to order costs and the decision of the Secretary taxing and settling them in the amount mentioned. However, his Honour's reasons, and no doubt, the submissions put to him, focused on the decision of the Secretary. Moreover, since the decision to order costs had been made by the Tribunal while constituted by the President (a Judge of the Court), it would have been incompetent for his Honour to deal with the matter of an application for review of that decision: it would have had to be heard by a Full Court: see Federal Court of Australia Act 1976 (Cth) s 20(2). 3 We proceed on the basis that it was only the decision of the Secretary, as defined in the application and the amended application, of which review was sought. BACKGROUND 4 We give the following chronological account of the background facts: 1. On 26 February 1996, GST commenced proceeding File CT 2 of 1996 in the Tribunal. GST claimed to be the owner of copyright in certain drawings for the manufacture of water meter assemblies used primarily by local authorities for measuring water consumption and charging for that consumption. The application to the Tribunal was addressed to the State of Queensland ("Queensland") and asserted that "services of the State of Queensland" were provided by: (a) Brisbane City Council; (b) 328 towns, shires and cities in Queensland; and (c) Queensland Treasury Corporation. The originating process in the Tribunal alleged that Queensland had infringed GST's copyright by requiring Davies Shephard Pty Ltd, Davies Shephard (Queensland) Pty Ltd and GSA Industries (Aust) Pty Ltd (a company apparently not related to GST) to do certain things in relation to the drawings. GST sought a determination by the Tribunal under s 183(5) of the Act. Subsections 183(1) and (5) of the Act provided, relevantly, as follows: "(1) The copyright in an … artistic work … is not infringed by … a State, or by a person authorized in writing by … a State, doing any acts comprised in the copyright if the acts are done for the services of the … State. ..................................................................................................... (5) Where an act comprised in a copyright has been done under subsection (1), the terms for the doing of the act are such terms as are, whether before or after the act is done, agreed between the … State and the owner of the copyright or, in default of agreement, as are fixed by the Copyright Tribunal." 2. On 15 August 1996, the Tribunal, constituted by the President, Sheppard J, granted leave to GST to withdraw its application, ordered that it file a notice of withdrawal, and made the following as its third order of that day: " ... that the applicant pay to the respondent its costs of the application, such costs, in default of agreement, to be taxed by the Secretary to the Tribunal in accordance with the highest scale of costs applicable to actions brought in the Federal Court of Australia." 3. On 11 April 1997, Queensland filed its bill of costs with the Tribunal. The bill comprised 452 items. 4. On 9 October 1997, GST served its notice of objections to Queensland's bill of costs. It objected to all 452 items. 5. The Secretary was Anthony Peter Tesoriero, who was also a Deputy Registrar of the Federal Court. His affidavit read before the primary judge, included the following: " ... on 20 October 1997, I commenced to tax the bill of costs as delivered to me by the State of Queensland. 5. The taxation of the bill of costs proceeded before me on 20 October 1997 when Mr Andrew Abaza, solicitor, appeared on behalf of the applicant, and Ms Majella Pollard, solicitor, of Crown Law appeared on behalf of the State of Queensland. Objections to each item were taken by Mr Abaza, and the taxation continued and was completed on 7 November 1997. On that last mentioned occasion, the applicant was represented by Ms Greenwood, solicitor of Sydney. 6. At the commencement of the taxation of costs on 20 October 1997, I informed the legal representatives that as there were no rules provided for taxation of costs of matters determined in the Copyright Tribunal, I would apply the rules of the Federal Court, in so far as they could be applied to that taxation of costs. 7. At the conclusion of the taxation on 7 November 1997, I informed the legal representatives then present that the costs of the State of Queensland would be allowed in the amount of $18,059.70. I signed and dated the bill of costs as allowed in that amount on 7 November 1997." 6. On 24 November 1997, Mr Abaza, GST's solicitor, faxed a notice of motion to the Tribunal seeking reconsideration by the Secretary of his decision disallowing GST's objections (to the extent that he had disallowed them). The notice of motion was a 19-page document which again addressed each of the 452 items in Queensland's bill. 7. On 2 December 1997, the Secretary signed a certificate of taxation in the sum of $18,059.70. 8. Mr Abaza apparently received the Secretary's certificate on 8 December 1997 and he wrote to the Secretary on 10 December 1997 as follows: "Dear Sir, re: FILE NO. C.T. 2 OF 1996 G.S. TECHNOLOGY PTY LTD –v- STATE OF QUEENSLAND On 24 November 1997 an application for review of the taxation in the above matter was filed. On 8 December 1997 I received a purported Certificate of Taxation without reference to my client's application for review. Could you kindly advise me by return what became of my client's application for review with a statement of reasons." 9. On 24 December 1997, GST filed its originating application in this Court (QG 210 of 1997) seeking review of the Secretary's decision to tax and allow the costs of $18,059.70. The application named only the Secretary as respondent. 10. On 6 February 1998, the Secretary filed a notice of objection to competency under O 54 r 4 of the Federal Court Rules, asserting: "1. This Court does not have jurisdiction to hear the application. 2. The decision of the Respondent of 2 December 1997 to issue a certificate of taxation is not a decision subject to review under the Administrative Decisions (Judicial Review) Act 1997." 11. On 24 March 1998, GST gave notice of a constitutional matter under s 78B of the Judiciary Act 1903 (Cth). In substance the notice stated that if it was correct, as asserted in the Secretary's notice of objection to competency, that this Court lacked jurisdiction, then s 174 of the Act "to the extent that it purports to confer … judicial power upon [the Secretary] in the making of a decision, and as a person holding office in the public service of the Commonwealth, [was] invalid and contrary to Chapter III of the Constitution." 12. On 8 May 1998, Cooper J directed GST to serve Queensland. 13. On 14 May 1998 his Honour ordered that Queensland be joined as second respondent, dismissed the Secretary's objection to competency and gave GST leave to file an amended application (this was filed on the same day, 14 May). 14. Pursuant to directions of Cooper J, Queensland requested further and better particulars on 17 June 1998 and GST supplied them on 1 July 1998. 15. On 31 July 1998, the Attorney-General for the Commonwealth intervened by the Solicitor-General to support the validity of s 174 of the Act. 16. The proceeding at first instance was heard by Cooper J on 16 March 1999 and his Honour delivered judgment on 15 April 1999 and ordered as follows: "1. The application is dismissed. 2. The applicant pay the first respondent's costs of and incidental to the application up to and including 31 July 1998 and the costs of a submitting appearance of 16 March 1999, but excluding the costs on the objection to competency and any outstanding costs of the application for security for costs, to be taxed if not agreed. 3. The applicant pay the second respondent's costs of and incidental to the application, but excluding any outstanding costs of the application for security for costs, to be taxed if not agreed." REASONS OF PRIMARY JUDGE 5 The issues before his Honour and on the appeal involve s 174 of the Act. That section is as follows: "(1) The Tribunal may order that the costs of any proceedings before it incurred by any party, or a part of those costs, shall be paid by any other party and may tax or settle the amount of the costs to be so paid, or specify the manner in which they are to be taxed. (1A) In taxing or settling under subsection (1) the amount of the costs, or of a part of the costs, of any proceedings before the Tribunal incurred by a party, the Tribunal or the person or persons taxing or settling those costs, as the case may be, shall allow so much only of the amount as in the opinion of the Tribunal or the person or persons, as the case may be, would be allowed if the proceedings were proceedings before the Federal Court of Australia and the costs were taxed under the Federal Court Rules. (2) Costs directed by the Tribunal to be paid to a party may be recovered by that party in any court of competent jurisdiction. (2A) In any proceedings before a court under subsection (2) for the recovery of costs directed by the Tribunal to be paid to a party, a certificate signed by the Secretary to the Tribunal that states that the costs have been taxed or the amount of the costs has been settled and sets out the amount of the costs as so taxed or settled is prima facie evidence of the matters stated in the certificate." 6 The first submission addressed by his Honour was that s 174(1A) vests the judicial power of this Court in the Secretary. His Honour dealt with this submission as follows: "On its proper construction s 174(1A) has three elements. They are: (i) that the costs being taxed or settled by the Tribunal or the person directed by the Tribunal to tax and settle the costs, have been incurred by a party; (ii) that the Tribunal or person doing the taxing form an opinion as to the amount which would have been allowed on taxation if the matter were one which had been conducted before the Federal Court of Australia and the costs of that proceeding had been taxed under the Federal Court Rules; (iii) that the Tribunal or person doing the taxing allow an amount for the costs incurred in a sum equal to the amount in respect of which the opinion is held. The section does no more than require the Tribunal or person doing the taxation to form an opinion of an amount which an hypothetical taxation would produce of the matter in the Federal Court, if taxed in accordance with the Federal Court Rules. The Tribunal is not invested with, or required to exercise any power of the Federal Court or to decide any question of law or fact under the Federal Court Rules. The statutory requirement is to form an opinion of a monetary sum and to allow the claim for the costs incurred in the amount concluded upon the formation of the required opinion. The source of the discretionary power in the Tribunal to award costs and the mechanism for taxing and settling those costs is contained solely in s 174 of the Copyright Act. It is not sourced in, nor a derivative of, the power of the Federal Court of Australia to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth), nor the rules made under that Act relevant to the ordering, taxing, settling or enforcing of an order for costs made in proceedings in the Federal Court of Australia." 7 The second submission was that the power to award costs is inherently judicial, because it is a power to adjudicate a dispute about rights and obligations arising solely from the operation of the law on past events and conduct. Cooper J disagreed, explaining that there is no common law right to an award of costs and that the power to award costs is always statutory. 8 The third submission was that the Secretary's decision was vitiated because he had failed to give reasons. His Honour said that in the absence of a statutorily imposed duty to give reasons, the Secretary was not obliged to give them. It is convenient to note here that his Honour added: "The applicant has not made any application under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) for reasons for the Secretary's decision on the taxation in respect of all or any of the amounts allowed and no argument was advanced by the applicant that the letter to the Secretary of 10 December 1997 constituted such a request." 9 The fourth and final submission comprised challenges in respect of the Secretary's decisions on particular items in Queensland's bill of costs. His Honour noted that: "Each of the items involved the taxing officer in forming an opinion as to what amount, if any, would have been allowed if the proceedings had been brought in the Federal Court and taxed in accordance with the Federal Court Rules." Cooper J dealt with the items in four categories and concluded that the grounds of challenge relied on were not established in relation to any of them. 10 It seems best to say at once that we see no error in the way in which the learned primary judge dealt with the submissions that were put to him. REASONING ON THE APPEAL Ground I 11 The first ground of appeal is headed "[t]he [s]tatutory requirement for the giving of [r]easons point." 12 In its notice of appeal GST refers to Regulation 15 of the Copyright Tribunal (Procedure) Regulations and s 13 of the ADJR Act. Before the learned primary judge, GST had also relied on O 62 r 43 of the Federal Court Rules. 13 We agree with his Honour that O 62 r 43, which provides for the statement by a taxing officer of reasons for decision upon a reconsideration of a decision to allow or disallow items in a bill, does not apply here. The reason is that Queensland's costs were not "costs … to be taxed under any order of the [Federal] Court, or under the [Federal Court] Rules, [or] costs to be taxed in the [Federal] Court under any Act": see O 62 r 2 of the Federal Court Rules. 14 On the appeal, Mr Abaza solicitor for GST submitted, as he had not done before the primary judge, that his letter dated 10 December 1997, set out earlier, was a request for reasons under s 13 of the ADJR Act. This was a bold submission, because his client, Mr Stack, had sworn an affidavit on 9 June 1998 characterising the request for reasons in Mr Abaza's letter of 10 December 1997 as a request for reasons as to what had become of GST's faxed notice of motion of 24 November 1997. The sequence of events set out earlier, like the terms of the letter itself, make it clear that Mr Stack's characterisation of the request in his affidavit was the correct one. We have no hesitation in rejecting the submission that by Mr Abaza's letter dated 10 December 1997, GST made a request for reasons under s 13 of the ADJR Act. 15 Regulation 15 referred to earlier is as follows: "15(1) The Tribunal shall, when making an order, state in writing its reasons for making the order." But the Secretary is not "the Tribunal" and the Secretary's decisions on the items in Queensland's bill of costs are not orders of the Tribunal: see s 138, and the definition of "Tribunal" in s 10, of the Act. 16 Regulation 15 was not relied on before the primary judge. If GST had sought to rely on it in support of an attack on the decision of the Tribunal itself, leave would have been necessary and we would not have been readily disposed to grant it. 17 There is no substance in Ground I in the notice of appeal Ground II 18 This ground in the notice of appeal is headed "[t]he construction point of s 174(1A)". The notice of appeal states: "The proper construction of s 174(1A) did not permit, it is submitted, the Tribunal to form an opinion of a monetary sum…pre-eminently by a matter of discretion…" Notwithstanding further elaboration in the notice of appeal on this ground we have difficulty understanding it. 19 The terms of s 174(1A) speak for themselves. They require the Tribunal or other taxing or settling person to allow "so much only" as in that person's "opinion" would be allowed "if" the proceeding were a proceeding before the Court, and "if" the costs were being taxed under the Federal Court Rules. The subsection therefore requires the person to form an opinion as to what decisions a Registrar as taxing officer would make on the items in the bill (see O 62 r 8(1)). No doubt, subs 174(1A) contemplates that the Tribunal or other person will, in order to form the opinion required by the subsection, form opinions as to the reasoning processes that would be engaged in by the Registrar as taxing officer in arriving at his or her decisions, if he or she were taxing a bill of costs in the Court and under the Court's Rules. Ground III 20 This ground is called in the notice of appeal "[t]he Constitutional issue". 21 GST submits that s 174(1A) is invalid because it vests judicial power of the Commonwealth in a person other than a judge appointed under Chapter III of the Constitution. 22 We reject the submission. The power granted to the Tribunal by s 174(1) and the requirement imposed by s 174(1A) upon the Tribunal or other "settling or taxing person" are administrative not judicial. Neither the Tribunal nor that person is required to exercise powers conferred upon the Federal Court, such as by s 43 of the Federal Court of Australia Act 1976 (Cth). 23 The fact that the process engaged in by the Tribunal or other person in dealing with the items in a bill of costs may "look like" the process of taxation under O 62 of the Federal Court Rules does not make it that process. 24 The terms of s 174(1A) themselves acknowledge a distinction between what the Tribunal or other person is required to do on the one hand and an actual taxation of costs under the Court's Rules on the other. 25 The fact that for convenience, when defining the role of administrative decision-makers, the legislature adopts concepts relevant to judges, courts or judicial power, does not signify that judicial power is indeed being conferred on these decision-makers; for examples, see s 171 of the Act and Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 at 183. 26 There is no substance in the challenge to the constitutional validity of s 174(1A). Ground IV 27 This ground is that the result of the decision of the primary judge is to enable the Tribunal to impose a "pecuniary penalty" by its "opinion" and at its "discretion". 28 Again, we have difficulty in understanding this ground as propounding legal error. We should not be taken to accept that there is no redress whatever in respect of any decision taken by the Tribunal or other person exercising the taxing or settling function under s 174(1A). 29 There is no substance in Ground IV. The legislature was entitled to fix the costs payable or to establish a mechanism for the fixing of them. 30 Under this ground in the notice of appeal, GST sought to complain that s 174(1A), if construed as the primary judge had construed it, would entail a conferral on a Chapter III judge of a non-judicial function inconsistent with the judicial function and the exercise of judicial power. This submission does not appear to have been put to the primary judge. In any event, we disagree, and our reasons are to be found in s 140 of the Act and the principles recognised in such cases as Grollo v Palmer (1995) 184 CLR 348. Ground V 31 This ground is that the exercise of the power in s 174(1A) and the purported determination of quantum issues constituted error of law. 32 GST submits that the Secretary must have departed from his statement, made at the beginning of the taxation, that he intended to apply the Federal Court Rules, because the amount of $18,059.70 was obviously excessive when compared to certain affidavit evidence of an experienced legal officer for Queensland. 33 We do not think that there is any substance in the submission. Ground VI 34 GST submits that it should not have been ordered to pay any costs of the Secretary who should have filed a submitting appearance from the outset rather than appear for a time in an adversarial role. 35 It will be recalled that Cooper J ordered GST to pay the Secretary's costs down to 31 July 1998 and of a submitting appearance on the hearing on 16 March 1999. 36 His Honour's order was a discretionary one. As the Secretary has submitted on the hearing of the appeal, Cooper J was entitled to take the view that down to 31 July 1998 the Secretary had a legitimate, albeit limited, role in supporting the constitutionality of s 174(1A). We do not think his Honour's discretion on costs is shown to have miscarried. CONCLUSION 37 For the above reasons, and noting that the Attorney-General for the Commonwealth, intervening, does not seek an order for costs, the Court orders that: 1. The appeal be dismissed. 2. The appellant pay the costs of the first and second respondents of the appeal. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 27 August 1999 Solicitor for the appellant: Mr A Abaza Counsel for the first respondent: Mr P. Hack Solicitor for the first respondent: Australian Government Solicitor Counsel for the second respondent: Mr P J Flanigan Solicitor for the second respondent: Crown Law Counsel for the intervener: Mr D M J Bennett QC with Mr R Orr Solicitor for the intervener: Australian Government Solicitor Date of Hearing: 26 August 1999 Date of Judgment: 26 August 1999