Federal Court of Australia EEU20 v Meat Industry Employees' Superannuation Fund Pty Ltd (Trustee) (No 2) [2020] FCA 1536 File number: VID 946 of 2019 Judgment of: MORTIMER J Date of judgment: 21 October 2020 Catchwords: COSTS – application by successful parties for costs against respondent tribunal and trustee – where both respondents filed submitting notices save as to costs – discussion of purpose and effect of submitting notices – application dismissed Legislation: Federal Court of Australia Act 1976 (Cth) s 37M Superannuation (Resolution of Complaints) Act 1993 (Cth) s 46 Federal Court Rules 2011 (Cth) r 12.01 Cases cited: Bullivant v Australian Meat Industry Superannuation Pty Ltd [2018] FCA 1588 Choice Pharmacy Vincentia Pty Ltd v Australian Community Pharmacy Authority (No 2) [2020] FCA 363 Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 EEU20 v Meat Industry Employees' Superannuation Fund Pty Ltd (Trustee) [2020] FCA 1359 Highland v Labraga (No 3) [2006] NSWSC 871 Madsen v Power (No 2) [2010] FCA 686 Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 Pham v Victims of Crime Assistance Tribunal [2016] VSCA 135 R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; 144 CLR 13 Division: General Division Registry: Victoria National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 25 Date of last submissions: 7 October 2020 Date of hearing: Determined on the papers Counsel for the Applicants: Mr S Burt Solicitor for the Applicants: Legal GP Counsel for the First Respondent: Mr SL Freire Solicitor for the First Respondent: Greenfields Solicitor for the Second Respondent: Ms E Lee ORDERS VID 946 of 2019 BETWEEN: EEU20 BY HER LITIGATION REPRESENTATIVE EEV20 First Applicant EEW20 Second Applicant EEX20 Third Applicant AND: MEAT INDUSTRY EMPLOYEES' SUPERANNUATION FUND PTY LTD AS TRUSTEE OF THE MEAT INDUSTRY EMPLOYEES' SUPERANNUATION FUND First Respondent SUPERANNUATION COMPLAINTS TRIBUNAL Second Respondent order made by: MORTIMER J DATE OF ORDER: 21 October 2020 THE COURT ORDERS THAT: 1. The parties bear their own legal costs of the proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MORTIMER J: 1 On 23 September 2020, the Court made orders setting aside a decision of the Superannuation Complaints Tribunal and remitting the matter to the Tribunal for determination according to law: EEU20 v Meat Industry Employees' Superannuation Fund Pty Ltd (Trustee) [2020] FCA 1359 (the principal reasons). Neither the Tribunal, nor the trustee whose decision was under review in Tribunal, played any active part in the proceedings, and both filed submitting notices pursuant to r 12.01 of the Federal Court Rules 2011 (Cth). 2 At [102] of the principal reasons, the Court stated: In their written submissions (although not in their amended notice of appeal) the applicants stated that they seek an order for costs. This was not the subject of argument and though the respondents did not participate in the hearing they stated that they wished to be heard in the event the applicants pressed for an order for costs. In my opinion, there having been no active contradictor, and there being no evidence of unreasonable conduct by either of the respondents, it would not be appropriate to make orders that the respondents, or either of them, compensate the applicants for their legal costs of this proceeding. However, since the applicants raised this matter in their submissions, they will have an opportunity to file written submissions if they do intend to press for an order for costs, and the respondents will have an opportunity to file written submissions in response. 3 In the event, the applicants did file submissions, as did the Tribunal and the trustee. The applicants sought an order for costs against both respondents, in such portions as the Court determines appropriate. 4 For the reasons that follow, the appropriate order is that each party bear their own costs of the proceeding. Submissions The applicants' submissions 5 The applicants' costs submissions were largely directed towards the conduct of the Tribunal. Relying on the findings made by the Court in the principal reasons, they submitted that: (a) the Tribunal failed to accord them procedural fairness; (b) the Tribunal acted unreasonably; and (c) had it not been for these failings, they would not have had to commence proceedings in this Court and would not have incurred the cost of doing so. 6 The applicants submitted that the trustee and the Tribunal "have both stood by and thereby effectively guaranteed that the Applicants would need to traverse the appeal process and do so at their own cost" (at [8]). 7 As to the nature of the order they sought, the applicants submitted (at [10]): In these circumstances, the Applicants seek an order that "costs follow the event" and that the Court exercise its inherent discretion in whatever manner it deems appropriate to portion that between the respondents, who have ultimately caused the need for the Applicants to voice their concerns in this forum. The trustee's submissions 8 The trustee referred to several New South Wales cases, in particular Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 at [38]-[42] and Highland v Labraga (No 3) [2006] NSWSC 871 at [19]-[23], which it contends "stand as authority for the proposition that a respondent who files a submitting notice except as to costs is generally to be regarded as immune from any liability for any costs incurred subsequent to the filing of the notice" (at [5]). 9 The trustee submitted that: (a) the applicants have not identified any circumstances that would justify a departure from this general rule; (b) by filing a submitting notice, the trustee elected to abide by the decision of the Court; (c) it would be unfair for the Court to order it to pay the applicants' costs when the Tribunal on review had no power to order costs and the error identified by this Court was the Tribunal's error, not the trustee's; (d) the trustee did not add to the applicants' costs; (e) there was, in any event, no good reason why the trustee was named as a party in the proceedings in this Court; and (f) it is established practice that, where a tribunal's proceedings are the subject of an application for judicial review, the tribunal should abide by the decision, and no costs should be ordered against the tribunal. The Tribunal's submissions 10 Consistently with the trustee's submissions, the Tribunal submitted (at [4]): It is submitted that the approach taken by the SCT to take no active part and not act as contradictor, is the standard approach taken by the SCT and all primary tribunals from which appeals and or judicial review proceedings may be filed in the Federal Court of Australia. In so doing, the Court would require exceptional circumstances to award costs against the primary tribunal as opposed to the original decision maker vested with original decision making power. 11 The Tribunal submitted that the applicants have failed to point to any conduct by either of the respondents that would justify a departure from the general rule. Resolution 12 It is necessary first to say something briefly about the function of submitting notices under the Court's Rules. The Rules provide expressly for this process, and the notices perform an important function in the administration of justice, and the discharge of the Court's judicial function in accordance with s 37M of the Federal Court of Australia Act 1976 (Cth). A submitting notice is a mechanism whereby a party to a proceeding in this Court formally indicates that it will abide by the outcome of the Court's exercise of judicial power. The party "submits to any order the Court may make". It is a step in a proceeding beyond simply not appearing. 13 As r 12.01(3) and (4) make clear, the effect of filing such a notice is intended to compel a party to adhere to that position unless leave is granted by the Court for it to change its position. This is a further indication of the intended final effect of such a notice being filed. 14 While an applicant under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) will still have to prove error in the Tribunal's review, and will still have to satisfy the Court the relief sought is appropriate, the filing of such notices removes any active contradiction to the position being advanced by the applicant. The absence of active contradiction not only reduces the costs incurred by an applicant, and the time and resources expended by both an applicant and the Court, it removes the prospect of any appeal and provides certainty and finality for an applicant in a situation where an applicant is successful. These are valuable attributes. Parties should not be discouraged from employing these processes by the spectre of a costs order being made against them in any event. Of course, there may well be circumstances where a party who files a submitting notice behaves in a way which merits a costs order being made, but as the Court noted in the principal reasons, that is not this case. Should an order for costs be made against the trustee? 15 It is the case, contrary to the trustee's submissions, that a trustee will sometimes take an active part in proceedings under s 46 of the Complaints Act. It is generally appropriate that the trustee be made a party, as it has a central interest in the outcome of both the Tribunal's review and any proceeding in this Court, and in the manner in which the matter before the Tribunal and the Court is finally resolved. 16 Nevertheless, where a submitting notice has been filed, and in addition to the matters I have explained above, I respectfully adopt the observations of Robertson J in Bullivant v Australian Meat Industry Superannuation Pty Ltd [2018] FCA 1588 at [58]-[59]: The applicant sought an order that her costs in this Court be paid by the first, second, third, fourth and fifth respondents. The applicant submitted that the submitting appearances of those respondents did not mean there should be no order as to costs against them. The applicant referred to Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2) [2014] NSWCA 317; 86 NSWLR 645, as considered by Perry J in Commissioner of Taxation v Warner (No 2) [2015] FCA 1281; 244 FCR 498 at [21]-[22]. In my view there should be no order for costs in this application. I accept that a submitting appearance may not always "operate as some form of insulation" from costs consequences, see Kisimul Holdings at [19], but I consider there to be additional considerations in the present case. First, this was not an appeal as such, although referred to as an appeal in s 46(1), but an application for judicial review in the Court's original jurisdiction. Second, I do not conclude that the respondents against whom the applicant seeks a costs order caused the Tribunal to err in law, as I have found it did. Third, the application being on questions of law from a decision of a tribunal, it was necessary for the applicant, even if the first to fifth respondents had consented to the application being allowed, to persuade the Court that there had been an error of law on the part of the Tribunal and to articulate the basis for that conclusion: see Kovalev v Minister for Immigration and Multicultural Affairs [1999] FCA 557; 100 FCR 323 at 326-328 per French J, approved in Lobo v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 168; 132 FCR 93 at [56] and Irwin v Military Rehabilitation and Compensation Commission [2009] FCAFC 33; 174 FCR 574 at [13]-[14] and Consent Orders Involving a Federal Tribunal Practice Note (GPN-TRIB) at [2.1]. Fourth, I have not accepted the applicant's submission that the Court should make orders disposing of the matter, so it could not be said that the applicant has succeeded in that respect, although she may do so when the matter returns to the Tribunal. It is these matters which provide the context in which the submitting appearances were filed: see Kisimul Holdings at [14]. I also note that Warner (No 2), like Kisimul Holdings, was not an application for judicial review of a decision of a tribunal. 17 The applicants have not identified any conduct on the part of the trustee that would justify making an order that the trustee pay their costs. Indeed, the applicants' submissions were directed primarily to the conduct of the Tribunal, and its failure to respond as they contended it should have to the changing situation after its review commenced. 18 On review of the Tribunal's decision, the critical fact was that the former spouse informed the Tribunal that the widow had been charged with murder shortly before the Tribunal's decision. It was the Tribunal's failure to engage properly with that new information that led to the Tribunal's decision being set aside. In the words of Robertson J, the trustee did not cause the Tribunal to err in law. And by promptly filing a submitting notice, the trustee did not cause the applicants to incur additional costs. 19 There will be no order for costs made against the trustee. Should an order for costs be made against the Tribunal? 20 The Tribunal will generally adopt a position consistent with the principles in R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; 144 CLR 13. That is what the Tribunal did here. 21 I respectfully agree with the following statement of the Victorian Court of Appeal in Pham v Victims of Crime Assistance Tribunal [2016] VSCA 135 at [5]: It would be a most unusual case in which a tribunal which has not actively defended its decision would be ordered to pay the costs of a successful appeal against that decision. While the Court has power to make such an order, and the matter is always to be decided in the exercise of the Court's discretion according to the circumstances of the particular case, the general assumption that costs will follow the event does not apply in such circumstances; to the contrary, a tribunal that has not actively taken part in the proceeding will usually not be ordered to pay the successful party's costs. It has been said that the circumstances in which an order for costs may be made against a tribunal on appeal must be exceptional. It has also been said in this Court that costs ought not to be awarded against a statutory tribunal which makes an order in excess of its powers unless that tribunal has been guilty of serious misconduct or corruption, or has otherwise acted perversely. These observations should not be thought to prescribe any exhaustive test for the exercise of the costs discretion in these kinds of cases. The circumstances will always need to be considered to see whether any departure from the usual rule is warranted. Of course, different considerations will apply if the tribunal has taken an active role in the proceeding; depending on the nature of that role, such a tribunal may be in the same position in respect of costs as any other party. (Footnotes omitted.) See also Madsen v Power (No 2) [2010] FCA 686 at [21]; Choice Pharmacy Vincentia Pty Ltd v Australian Community Pharmacy Authority (No 2) [2020] FCA 363 at [9]. 22 The explanation for this approach was pithily set out by Wilcox J in Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 at 612: It seems to me somewhat hard for the courts at the one time to tell the tribunal that it should not actively intervene to defend its decision and, at the same time, to order the tribunal to pay costs if, without it having had an opportunity of defending its decision, the decision is held to be bad in law. 23 The Court has found the Tribunal erred in law. However, there was and is no suggestion that the Tribunal engaged in any kind of misconduct, or exercised its powers for an improper purpose. While the circumstances were unusual, the principal error identified was a straightforward judicial review error of denial of procedural fairness. The Court did accept there was force in the applicants' submissions on legal unreasonableness, but it did not determine the application on this basis. In any event, legal unreasonableness is quite different conceptually from improper or unreasonable conduct justifying an order that one party pay the costs of another party. 24 There will be no order for costs against the Tribunal. Conclusion 25 I accept that the applicants have had to incur legal costs in order to challenge the Tribunal's decision and that, having been successful, the usual practice in an adversarial and costs-based jurisdiction is that they would not have to bear those costs. The fact that they have been successful is a matter to weigh in the balance in the exercise of the broad discretion the Court has concerning costs. Nevertheless, that "usual" practice of costs following the event is generally applied where a proceeding is actively contested, not where parties have filed submitting notices. Each case must be considered on its own facts, but in the circumstances of this proceeding, and taking into account the matters to which I have referred, the appropriate order is that each party bear its own costs of the proceeding. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mortimer. Associate: Dated: 21 October 2020