FEDERAL COURT OF AUSTRALIA Australian Securities and Investments Commission v McCormack (No 2) [2017] FCA 684 Appeal from: McCormack and Australian Securities and Investments Commission [2016] AATA 1021 File number: VID 6 of 2017 Judge: O'CALLAGHAN J Date of judgment: 19 June 2017 Catchwords: COSTS – whether the Court should issue a certificate under the Federal Proceedings (Costs) Act 1981 (Cth) to unsuccessful respondent Legislation: Federal Proceedings (Costs) Act 1981 (Cth), s 6(1) Cases cited: Anti-Doping Rule Violation Panel v XZTT (No 2) [2013] FCAFC 135 Bullock v The Federated Furnishing Trades Society of Australasia (No 2) (1985) 5 FCR 476 Richards v Faulls Pty Ltd [1971] WAR 129 Date of hearing: 15 June 2017 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 11 Counsel for the Applicant: Dr P Bender Solicitor for the Applicant: Australian Securities and Investments Commission Counsel for the Respondent: Ms R Ellyard Solicitor for the Respondent: Doogue O'Brien George Pty Ltd ORDERS VID 6 of 2017 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Applicant AND: GERARD MCCORMACK Respondent JUDGE: O'Callaghan j DATE OF ORDER: 19 june 2017 THE COURT ORDERS THAT: 1. The respondent be granted a certificate to the effect that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under the Federal Proceedings (Costs) Act 1981 (Cth) to the respondent in respect of: (a) the costs incurred by the respondent in relation to the appeal; and (b) the costs incurred by the applicant in respect of the appeal that are required to be paid by the respondent in pursuance of the order of the Court of 15 June 2017. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT O'CALLAGHAN J: 1 This was an appeal by the Australian Securities and Investments Commission (ASIC) from a decision of the Administrative Appeals Tribunal (Tribunal) made on 14 December 2016. On 15 June 2017, I made orders that the appeal be allowed, that the decision of the Tribunal be set aside, that the matter be remitted to the Tribunal to be heard and determined according to law and that the respondent (Mr McCormack) pay the applicant's costs of the appeal. On that day counsel for the respondent applied for a costs certificate under s 6(1) of the Federal Proceedings (Costs) Act 1981 (Cth). consideration 2 Section 6(1) of the Federal Proceedings (Costs) Act 1981 (Cth) provides: Subject to this Act, where a Federal appeal succeeds on a question of law, the court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal. 3 The considerations which guide the Court in determining whether to grant such a certificate have often been repeated. They are set out in Bullock v The Federated Furnishing Trades Society of Australasia (No 2) (1985) 5 FCR 476 (Bullock) at 477-8. Relevantly, the discretion of the Court is unfettered, but it must be exercised judicially and on proper grounds. There is no presumption in favour of the grant of a certificate once the pre-requisites are satisfied. 4 As the Full Court said in Richards v Faulls Pty Ltd [1971] WAR 129 at 137-8, in a passage quoted with approval in Bullock (1985) 5 FCR 476 at 478: The intention of the Act is clearly enough to relieve a litigant from the burden of the costs of an appeal in a case where he has obtained a favourable decision but has lost it on appeal because the court below erred on a question of law; the purpose of the Act is not, however, to promote litigation, nor to provide legal aid in a broad sense out of the Fund: see per Maguire J in Pataky v Utah Construction Pty Ltd (1966) 1 NSWR 698; 84 WN (Pt 1) (NSW) 201 at 208. It would be wrong for this Court to say anything which could be taken as fettering the unfettered discretion given by the Act, but nevertheless it appears to us that in broad terms the Act is aimed at giving relief in cases where the decision turns on a question of law, as contrasted with the facts of the particular case, where that question of law might at least reasonably be resolved in different ways, so that in a sense the unsuccessful party may be thought to have suffered some 'misfortune' owing to a doubt about the correct rule of law to be applied. 5 The Full Court in Anti-Doping Rule Violation Panel v XZTT (No 2) [2013] FCAFC 135 also said at [37] that "[t]he case for a certificate to be granted may be stronger where the error of law which is corrected is not an error expressly induced by the arguments of the applicant for the certificate but a conclusion independently reached by the court or tribunal from whom the appeal is argued". 6 Similarly, counsel for Mr McCormack contended that the purpose of s 6(1) of the Federal Proceedings (Costs) Act 1981 (Cth) is to deal with circumstances where "a respondent is brought into this Court to have a matter dealt with that, absent the errors of law, would not have needed to have been dealt with and would have been resolved one way or another in the Tribunal below". Mr McCormack's counsel argued that none of the grounds in relation to which the appeal succeeded, which is to say all of them, was induced by any proposition contended for on Mr McCormack's behalf before the Tribunal. Junior counsel for ASIC, quite properly, did not contest that submission. 7 ASIC, on the other hand, contended that the Court should not grant a certificate because this was a case in which the law was quite clear, and settled, and there was no principle involving any broader ramifications. The Tribunal simply made a number of legal errors. Mr McCormack, it was said, could have filed a submitting appearance and not actively have defended the matter. 8 ASIC also contended that the Court should take into account the benefit that Mr McCormack has received from the order of the Tribunal, namely, that, between the date of the Tribunal's decision and the date of the order allowing the appeal, he had the positive advantage of having his name completely removed from the register of disqualified persons kept ASIC and was free to seek employment elsewhere. Quoting from Bullock (1985) 5 FCR 476 at 479, ASIC characterised such a benefit as "[a] significant factor…which points towards the exercise of the discretion against the respondent…". 9 In my view, it is not to the point that this case involved no new matter of principle. I do not read Bullock (1985) 5 FCR 476, or any of the relevant cases, as so limiting the Court's unfettered discretion. Further, I do not consider that the respondent ought to have filed a submitting appearance in order to have the benefit of a costs certificate. Had he done so in this case, the errors of the Tribunal may not have been exposed. 10 Although the matter is finely balanced, and Mr McCormack has derived the benefit identified by ASIC, I am persuaded by the submissions of his counsel that a certificate should be granted. cONCLUSION 11 For those reasons, I will order that Mr McCormack be granted a certificate to the effect that in the opinion of the Court it would be appropriate for the Attorney-General to authorise a payment under the Federal Proceedings (Costs) Act 1981 (Cth) to him in respect of: (1) the costs incurred by him in relation to the appeal; and (2) the costs incurred by ASIC in respect of the appeal that are required to be paid by Mr McCormack in pursuance of the order of the Court of 15 June 2017. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Callaghan. Associate: Dated: 19 June 2017