Kraus v Menzie (No 2) [2012] FCA 84

FEDERAL COURT OF AUSTRALIA

Kraus v Menzie (No 2) [2012] FCA 84 Citation: Kraus v Menzie (No 2) [2012] FCA 84

Parties: JADE XAVIER KRAUS v MARK MENZIE and THE TRUCK FACTORY PTY LTD

File number: SAD 209 of 2010

Judge: MANSFIELD J

Date of judgment: 13 February 2012

Date of hearing: Heard on the papers

Date of last submissions: 24 January 2012

Place: Adelaide

Division: GENERAL DIVISION

Category: No catchwords

Number of paragraphs: 8

Counsel for the Applicant: P Heywood Smith QC

Solicitor for the Applicant: Duncan Basheer Hannon

Counsel for the Respondents: S Cole

Solicitor for the Respondents: Rossi Legal

IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 209 of 2010

BETWEEN: JADE XAVIER KRAUS

Applicant

AND: MARK MENZIE

First Respondent

THE TRUCK FACTORY PTY LTD

Second Respondent

JUDGE: MANSFIELD J DATE OF ORDER: 13 FEBRUARY 2012 WHERE MADE: ADELAIDE

THE COURT ORDERS THAT:

1. The respondents pay to the applicant 20% of her costs of the application. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 209 of 2010

BETWEEN: JADE XAVIER KRAUS

Applicant

AND: MARK MENZIE

First Respondent

THE TRUCK FACTORY PTY LTD

Second Respondent

JUDGE: MANSFIELD J DATE: 13 FEBRUARY 2012 PLACE: ADELAIDE

REASONS FOR JUDGMENT 1 I delivered judgment and made orders in this matter on 11 January 2012: Kraus v Menzie [2012] FCA 3. I made declaratory orders that the respondents sexually harassed the applicant contrary to s 28B of the Sex Discrimination Act 1984 (Cth) (the SD Act) by five separate categories of conduct, and ordered the respondents to pay the applicant damages of $12,000. I reserved the question of costs. 2 The parties have now made their submissions on costs. The applicant seeks costs of the application in the normal way. The respondents say there should be no order for costs. 3 Notwithstanding that the applicant succeeded in establishing sexual harassment in the five respects referred to, she did not succeed in much of her claim. 4 Her claim included claims on unlawful discrimination in employment contrary to s 14(2) of the SD Act. That claim was put on the basis that the applicant brought her employment to an end because of discrimination in employment by reason of her sex. She claimed she was isolated at, and in, her work because she had resisted the first respondent's advances towards her. It gave rise to a claim that she suffered significant psychological injury as a result, and she sought a considerable sum in damages. That claim failed. Her claim also included further instances of sexual harassment, ultimately contributing to the alleged unlawful discrimination, on seven other occasions. Those claims also failed. There was a significant issue as to the reliability of the evidence of the applicant and of the first respondent. In general terms, the instances of sexual harassment which I found to have occurred, in all but one case, did not involve any dispute between the applicant and the first respondent as to what had occurred. The issue was whether the sexual advances or conduct of a sexual nature was unwelcome. In those instances, on that issue, I preferred the evidence of the applicant. In respect of the other occasions, I did not accept her evidence that such conduct as I found to have occurred was unwelcome. Nor did I accept her evidence on the issue as to whether the applicant and the first respondent had a sexual relationship as he said. I note that the applicants' submissions referred to the question as to the existence of the sexual relationship as an "essential issue". It was so described by the respondents in submissions, but in my view that issue was but part of the pattern of evidence which required resolution of the issues between them. The applicant also points out that the details of the sexual relationship had not been properly particularised. I addressed that in the primary reasons for decision. I think that the respondents' Statement of Facts, Issues and Contentions of 17 March 2011 sufficiently put the applicant on notice of those allegations. I do not think that the absence of those formal particulars on matters which, on the findings, the applicant must have known if they occurred, are a reason to exercise the discretion as to costs in her favour. 5 The applicant also submits that, unless she receives an order for costs, her judgment would be rendered nugatory as she would have to pay the judgment sum to her solicitors, and secondly that to do otherwise would tend to defeat the objectives of the SD Act. As to the first point, that is a matter between the applicant and her solicitors. She presented a case which included a claim that she decided including that her decision to bring her employment to an end (it was not contended that she was dismissed by the second respondent or that the circumstances in which her termination of her employment occurred amounted to a constructive dismissal) by reason of ongoing sexual harassment which amounted to unlawful discrimination in employment. That is the claim which largely gave rise to the substantial damages claim. That is the claim which failed. Those comments also indicate that, in this case, the second point is without merit. Clearly, the Court should have regard to the objects of the SD Act. However, that does not mean that the applicant, who made extensive allegations of sexual harassment and then also of conduct amounting to sexual discrimination in employment contraventions of that Act, and succeeded only in some of the allegations of sexual harassment, should recover costs for the whole of the hearing. On the matters on which the applicant succeeded, much of the evidence was uncontentious and the hearing would have been very considerably shorter had they been heard alone. 6 For those reasons, I do not propose to simply award the applicant her costs of the action generally. Nor I do think it is appropriate to make an order which reflects the costs of issues. That would be complicated and difficult to apply. 7 I have taken into account that, generally, a successful party in proceedings should recover the costs of those proceedings, even if not successful on all issues: Cretazzo v Lombardi (1975) 13 SASR 4 at 16; Electricity Supply Industry Superannuation (QLD) Ltd v Deputy Commissioner of Taxation [2002] FCA 1417 at [9]. However, in this matter, the issues on which the applicant was unsuccessful are extensive and her principal claim, at least in terms of quantum, failed. I have also taken into account that the respondents have not suggested that any offer was made to the applicant in resolution to resolve her claims against them, apparently either to the Court or in the course of the consideration of her complaint first made to the Human Rights and Equal Opportunity Commission. The applicant, to justify her position, was therefore obliged to bring these proceedings. Nevertheless, in my view, the costs order should have regard to the circumstances to which I have referred. 8 I accordingly consider that the applicant should be awarded 20% of her costs of the application to be taxed, if not agreed. That is a broad-brush approach having regard to the circumstances to which I have referred. It is consistent with the approach of reducing costs to a significant degree as discussed in Inn Leisure Industries Pty Ltd v McLoy (No 2) (1991) 28 FCR 172. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.