FEDERAL COURT OF AUSTRALIA McKenzie v State of South Australia [2006] FCA 891 NATIVE TITLE – application to discontinue proceedings – leave granted NATIVE TITLE – costs – exercise of discretion under s 85A of Native Title Act in discontinuance proceedings – conduct of parties Held: The conduct of the parties justified the award of costs in favour of the respondents Native Title Act 1953 (Cth) s 85A Federal Court of Australia Act 1976 (Cth) s 43 McKenzie v State Government of South Australia [2005] FCA 22 cited Ankamuthi People v State Government of Queensland (2002) FCA 897 cited Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 cited Ruddock v Vadarlis (No 2) (2001) 155 FCR 229 cited Grundy v Lewis [1998] FCA 563 cited O'Neill v Mann [2000] FCA 1680 cited Ward v Western Australia (1999) 93 FCR 305 followed De Rose v State of South Australia (No 2) [2005] FCAFC 137 cited MARK McKENZIE (SNR), VIVIENNE McKENZIE, ANTHONY CLARK, CECIL BRADY & MICHAEL McKENZIE v STATE OF SOUTH AUSTRALIA AND ABORIGINAL LEGAL RIGHTS MOVEMENT INC No SAD 27 of 2006 FINN J ADELAIDE 30 JUNE 2006 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 27 OF 2006 BETWEEN: MARK McKENZIE (SNR) FIRST APPLICANT VIVIENNE McKENZIE SECOND APPLICANT ANTHONY CLARK THIRD APPLICANT CECIL BRADY FOURTH APPLICANT MICHAEL McKENZIE FIFTH APPLICANT AND: STATE OF SOUTH AUSTRALIA FIRST RESPONDENT ABORIGINAL LEGAL RIGHTS MOVEMENT INC SECOND RESPONDENT JUDGE: FINN J DATE OF ORDER: 30 JUNE 2006 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. Leave be granted to the applicants to discontinue proceeding number SAD 27 of 2006. 2. The applicants pay the respondents' costs of the discontinuance. is dealt with in Order 36 of the Federal Court Rules. Note: Settlement and entry of orders IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 27 OF 2006 BETWEEN: MARK McKENZIE (SNR) FIRST APPLICANT VIVIENNE McKENZIE SECOND APPLICANT ANTHONY CLARK THIRD APPLICANT CECIL BRADY FOURTH APPLICANT MICHAEL McKENZIE FIFTH APPLICANT AND: STATE OF SOUTH AUSTRALIA FIRST RESPONDENT ABORIGINAL LEGAL RIGHTS MOVEMENT INC SECOND RESPONDENT JUDGE: FINN J DATE: 30 JUNE 2006 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 This is a motion in which the applicants seek leave to discontinue the proceedings SAD 27 of 2006. The context in which the motion is brought, is not without significance. 2 The native title claim group represented by the applicants has already had an application under the Native Title Act 1953 (Cth) struck out: see McKenzie v State Government of South Australia [2005] FCA 22. Before that matter was struck out (for reasons relating both to the identification of the claim group and to the alleged authority of the claimants), the applicants had amended their application on a number of occasions. Following the strike out decision, a fresh application was filed on 16 February 2006 resulting in the present proceedings. 3 Shortly thereafter the Aboriginal Legal Rights Movement ("the ALRM") notified the applicants of perceived deficiencies in its Form 1. Once again these related both to authorisation and to the composition of the claim group. Initially, the applicants sought simply to amend their application, the amendment seemingly being to change the composition of the claim group somewhat. It was then made plain to the applicants that leave was required. 4 The ALRM opposed the grant of leave on the ground that there was a reasonable basis for concluding that the Form 1 would still be defective for reasons similar to those given in the earlier McKenzie litigation. On 12 May 2006, the application for leave to amend was adjourned to allow the applicants to address the ALRM's concerns. Instead of proceeding further with that application, the respondents purported to discontinue this proceeding. They have now conceded correctly that that is not within their power to do so as of right and that the leave of the Court is required. 5 The basis of the discontinuance is set out in an affidavit of the solicitor for the applicants, Mr McDonald: "3. After the hearing before His Honour Justice Finn on 12 May 2006, which considered the ALRM's objections to the Form 1 in this matter, I took further instructions from the Applicants in Pt Augusta on the following weekend. 4. The purpose of those further instructions was to prepare supplementary affidavits of the Applicants to respond to the ALRM's objections. 5. While taking those instructions I became aware for the first time that Willy Austin should have been named as an apical ancestor as part of the claim group description. Willy Austin had been raised as a possible apical ancestor by Dr Daniel Vachon, the anthropologist for the Kuyani-Wilyaru people and his name was raised at the authorization meeting on 16 July 2005. It was decided at this meeting not to include Willy Austin as an apical ancestor but no detailed discussion as to his exclusion took place. 6. As mentioned above I only became aware on the weekend of 13 May 2006 that descendants of Willy Austin do identify themselves as Kuyani. 7. Although I advised the applicants and they have considered the possibility of amending the present proceedings, I have been instructed to discontinue and lodge fresh proceedings to avoid any argument in relation to a perceived lack of authorization in relation to these proceedings. The reference to my advice should not be taken as any waiver of legal professional privilege." The discontinuance is made under O 22 of the Federal Court Rules by reason of the named applicants' representative position with respect to the claimant group. Leave of the Court is required under subrule (2): see Ankamuthi People v State Government of Queensland (2002) FCA 897. Where leave to discontinue is sought in a proceeding, the Court normally will allow an applicant to discontinue if he or she wants to, provided no injustice will be caused to the defendant: Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 at 879 which has been adopted in a number of cases in this Court. I have determined that discontinuance in this matter will occasion no injustice, subject to the question of costs. 6 The Court has a general discretion under s 43 of the Federal Court of Australia Act 1976 (Cth) to make cost orders. The principles informing the Court's discretion in such cases are well known: see eg. Ruddock v Vadarlis (No 2) (2001) 155 FCR 229 at par 234. However, when costs are sought in discontinuance proceedings, somewhat different considerations obtain to those that obtain under s 43. It has been recognised that the underlying policy of the Rules is that the discontinuing party should be liable to pay the other party's costs unless the Court orders otherwise: see e.g. Grundy v Lewis [1998] FCA 563. That policy, though, has not itself solidified into a principle which parallels the usual rule under s 43 of costs following the event. The Courts have indicated that, on a motion for discontinuance, the conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs: see O'Neill v Mann [2000] FCA 1680 at par [13]. 7 The consideration of an award of costs in this particular proceeding must, of course, be seen under the shadow of s 85A(1) and (2) of the Native Title Act. Section 85A provides: "(1) Unless the Federal Court orders otherwise, each party to a proceeding must bear his or her own costs. Unreasonable conduct (2) Without limiting the Court's power to make orders under subsection (1), if the Federal Court is satisfied that a party to a proceeding has, by any unreasonable act or omission, caused another party to incur costs in connection with the institution or conduct of the proceeding, the Court may order the first-mentioned party to pay some or all of those costs." 8 The most authoritative statement of the matters which should inform the exercise of discretion in awarding costs in light of this section was given by Lee J in Ward v Western Australia (1999) 93 FCR 305, in comments later endorsed by the Full Court in De Rose v State of South Australia (No 2) [2005] FCAFC 137. His Honour noted first, that s 85A(1) is intended to remove the expectation that costs will follow the event but that despite this, the Court retains its discretion as to costs unlimited by subrule (1); secondly the "unreasonable conduct" of the parties is not a jurisdictional fact which preconditions the exercise of the discretion and, conversely, s 85A(2) will not control or limit the discretion in subrule (1); thirdly, whilst the exercise of the discretion when making a costs order should be judicial, the starting point is that each party will bear their own costs. 9 In relation to the current application, it is, in my view, perfectly clear that a costs order should be made in favour of the two respondents. The reason that is the case is that the respondents have had to perform a tutelary function in relation to the conduct of this proceeding to date. That function has been discharged, primarily by the ALRM but concurred in by the State, in the interests of the orderly conduct of these proceedings and has assisted to that end. 10 There is a reasonable basis for concluding that the original application and the amendment that was proposed were seriously defective. It is not necessary that I express a final view on that matter. It equally is clear, from Mr McDonald's affidavit, that the applicants considered it necessary to respond to the ALRM's objections: a need which was made quite apparent to them when the matter was first heard and then adjourned on 12 May 2006. In these circumstances, it seems to me entirely proper and appropriate that a costs order should be made and I will order accordingly. 11 I order that leave be given to discontinue matter number SAD 27 of 2006 and the applicants pay the respondents' costs of the discontinuance. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. Associate: Dated: 4 July 2006 Counsel for the Applicants: Mr J Keen Solicitor for the Applicants: RDM Lawyers Counsel for the First Respondent: Mr C Kourakis QC with Mr S McCaul Solicitor for the First Respondent: Crown Solicitor's Office Counsel for the Second Respondent: Mr M Steele Solicitor for the Second Respondent: Mr J Walkley Date of Hearing: 30 June 2006 Date of Judgment: 30 June 2006