FEDERAL COURT OF AUSTRALIA Alcoa of Australia Retirement Plan Pty Ltd v Thompson (No 2) [2002] FCA 786 SUPERANNUATION – complaints Tribunal – successful appeal against tribunal decision – whether costs should follow the event – whether alleged misconduct of applicant supports no costs order – consideration of relevant legislative provisions Federal Proceedings (Costs) Act 1981 (Cth) ss 3(1), 3(1)(g), 6 Superannuation (Resolution of Complaints) Act 1993 (Cth) s 46(5) WE Bassett & Partners Pty Ltd v Doherty (1997) 76 IR 107 Clerical Administrative & Related Employees Superannuation Pty Ltd v Bishop (1997) 76 IR 139 Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748 Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1987) 17 FCR 211 Inn Leisure Industries Pty Ltd (Provisional Liquidator appointed) v DF McCloy Pty Ltd (No 2) (1991) 28 FCR 172 ALCOA OF AUSTRALIA RETIREMENT PLAN PTY LTD v DAVID THOMPSON W351 of 2001 RD NICHOLSON J 19 JUNE 2002 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W351 of 2001 BETWEEN: ALCOA OF AUSTRALIA RETIREMENT PLAN PTY LTD APPLICANT AND: DAVID THOMPSON RESPONDENT JUDGE: RD NICHOLSON J DATE OF ORDER: 19 JUNE 2002 WHERE MADE: PERTH THE COURT ORDERS THAT: The respondent pay the applicant's costs of the appeal, including reserved costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W351 of 2001 BETWEEN: ALCOA OF AUSTRALIA RETIREMENT PLAN PTY LTD APPLICANT AND: DAVID THOMPSON RESPONDENT JUDGE: RD NICHOLSON J DATE: 19 JUNE 2002 PLACE: PERTH REASONS FOR JUDGMENT 1 Reasons in this matter were delivered on 15 March 2002. An order was made that submissions be heard on costs. That order was made in circumstances where the applicant's application was allowed and the determination of the Superannuation Complaints Tribunal ("the Tribunal) dated 9 April 2001 was set aside as sought by that application after a contested hearing. The matter was remitted to the Tribunal for reconsideration according to law. 2 Section 46(5) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) provides: "(5) The Federal Court must not make an order awarding costs against a complainant if the complainant does not defend an appeal instituted by another party to the complaint." It is not in dispute that this provision does not have any application here in favour of the respondent because the respondent is not a complainant who did not defend the appeal. 3 For the applicant it is submitted in the circumstances of the result arrived at by the Court, the costs of the appeal including reserved costs should be awarded in favour of the applicant. This is supported by reference to WE Bassett & Partners Pty Ltd v Doherty (1997) 76 IR 107 at 120 and Clerical Administrative & Related Employees Superannuation Pty Ltd & Anor v Bishop & Anor (1997) 76 IR 139 at 154. 4 For the respondent it is submitted that there are reasons why the applicant as a successful party in this application should not receive its costs. The first reason is that although the applicant succeeded on the application it did so on only two of a number of issues and only four out of eight grounds of appeal. Secondly, because the applicant failed to uphold the standards required of a trustee and insurer. The argument is made in these terms: "This misconduct was partly of the cause of the matter needing to come to this Honourable Court. The misconduct was touched on in the Respondent's outline of argument and includes bias, delay and carelessness. Whilst the Court has found that the medical evidence was not the only relevant issue, the fact remains the medical evidence, including that of the Applicant's doctor, supported the Applicant's case. Inexplicably the Applicant trustee took it upon itself to obtain medical evidence from further afield which supported the employer's case. There has been no explanation for this conduct or for the way in which the trustee selected the doctors who, in responding to criticism of their evidence proved to be defensive, unbalanced and adversarial. The Applicant trustee failed to provide reasons for its decision or offer to the Tribunal or the Court anything which gave insight into that trustee's thought processes. Little wonder the Tribunal focussed on the medical evidence, the trustee offered no guidance at all as to its consideration of the application. The Applicant reached its decision initially without referring to important medical evidence for the Respondent, later asserting this was due to clerical oversight. By that, and the Applicant putting the matter on hold while looking for other evidence, and through general slowness, the Applicant caused great delay." Thirdly, it is said that before the Tribunal the applicant behaved toward the respondent in an aggressive and unbalanced manner. Accordingly, it is submitted the Court should withhold its approval of this conduct by refusing a costs order. 5 In response to a submission from the applicant that there is no evidence to support the respondent's claim of misconduct, it is asserted for the respondent that the record discloses the misconduct. In response to a submission for the applicant that the Court did not make findings of misconduct, the respondent submits that the Court's decision that the Tribunal failed to address the critical question removed the need to make those findings. In my opinion it also shows that the allegations of misconduct played no part in the resolution of the matter and therefore cannot now assist in a resolution of a costs order. 6 Certainly it is the case that costs do not have to follow the event: Hughes v Western Australian Cricket Association Inc (1986) ATPR 40-748 at 48136; Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1987) 17 FCR 211; Inn Leisure Industries Pty Ltd (Provisional Liquidator appointed) v DF McCloy Pty Ltd (No 2) (1991) 28 FCR 172. Nevertheless, the discretion available to the Court must be exercised judicially. 7 In my opinion the first of the three grounds relied upon by the applicant does not assist. The fact is, the application was resolved wholly in favour of the applicant. As to the second ground, the allegations of misconduct, I have already said that these played no part in the resolution of the appeal. The third ground is unsubstantiated as a matter of fact. 8 The Federal Proceedings (Costs) Act 1981 (Cth) provides in s 6 for the possibility that a court on a federal appeal which succeeds on a question of law may, on the application of a respondent to the appeal, grant to that respondent a costs certificate in respect of the appeal. On the face of it that is the position in which the respondent finds himself. He understandably contested the appeal against the award to him but the appeal has been resolved against him on a question of law. However, an appeal from the Superannuation Complaints Tribunal to this Court is not within the meaning of "federal appeal" as defined by s 3(1) of that Act. It is the case that an appeal from a decision of the Administrative Appeals Tribunal to the Federal Court comes within the meaning of "federal appeal": see s 3(1)(g). That, however, is not the case in respect of the Superannuation Complaints Tribunal. 9 Nevertheless, I am unpersuaded by the reasons advanced on behalf of the respondent that the costs order should not follow the event in this instance. The respondent chose to oppose the appeal. The reasons advanced on behalf of the respondent do not in my view constitute reasons which go to the substance of the appeal so as to justify no costs order being made against the respondent as the unsuccessful party. 10 For these reasons I consider that the applicant is correct in submitting that the costs of the appeal, including reserved costs, should be awarded in favour of the applicant. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson. Associate: Dated: 19 June 2002 Counsel for the Applicant: Mr GH Murphy Solicitor for the Applicant: Mallesons Stephen Jaques Counsel for the Respondent: Mr I A Morison Solicitor for the Respondent: Phillips Fox Date of Hearing: 7 December 2001 Date of last written submissions: 12 June 2002 Date of Judgment: 19 June 2002