Federal Court of Australia Pathmanathan v St John of God Healthcare Inc (No 4) [2023] FCA 817 File number(s): VID 781 of 2018 Judgment of: MCELWAINE J Date of judgment: 21 July 2023 Catchwords: COSTS – application for indemnity costs, alternatively party and party costs – where applicant made unsubstantiated allegations of fraud and improper conduct – where applicant disregarded comments of judge in related proceeding and persisted with claims despite deficiencies – partial indemnity costs order made Legislation: Federal Court Rules 2011 (Cth) r 40.02(b) Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 King v Yurisich (No 2) [2007] FCAFC 51 MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 Pathmanathan v Healthscope Operations Pty Ltd [2020] FCA 65 Pathmanathan v St John of God Healthcare Inc (No 3) [2023] FCA 628 Pathmanathan v St John of God Healthcare Inc [2019] FCA 1460 Division: General Division Registry: Victoria National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 16 Date of last submission/s: 27 June 2023 (Respondent) 7 July 2023 (Applicant) Date of hearing: Determined on the papers Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: Mr R Millar Solicitor for the Respondent: HWL Ebsworth Lawyers ORDERS VID 781 of 2018 BETWEEN: AJINTHA PATHMANATHAN Applicant AND: ST JOHN OF GOD HEALTHCARE INC Respondent order made by: MCELWAINE J DATE OF ORDER: 21 July 2023 THE COURT ORDERS THAT: 1. The applicant is to pay the respondent's costs of the proceeding assessed as to 30% of the respondent's total costs on an indemnity basis and the balance as between party and party. 2. The respondent's costs are to be assessed by a Registrar of the Court on a lump sum basis pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MCELWAINE J: 1 For reasons that I published on 13 June 2023, I dismissed this proceeding: Pathmanathan v St John of God Healthcare Inc (No 3) [2023] FCA 628. I invited costs submissions which I have now received and considered. 2 The respondent submits that costs should follow the event and be awarded on an indemnity basis. The applicant acknowledges that the usual rule is that costs follow the event but submits that in the particular circumstances, the respondent succeeded "only in a portion of its claim" and that in certain respects the conduct of the respondent prolonged the litigation and was inefficient. Further, the applicant submits that this is not a case for an award of indemnity costs. 3 The result of the proceeding is that the applicant failed in each of her claims. Her submission that the respondent succeeded only on a portion of its claim reflects a misunderstanding on her part about the burden of proof. Whilst it is true that a considerable amount of time was expended in this litigation in undertaking a detailed analysis of four matters of asserted departure by the applicant from appropriate standards of practice as a consultant anaesthetist, the central allegation which framed her case is that the respondent engaged in unlawful discriminatory conduct when, on 10 November 2014, it decided to suspend her accreditation rights at its hospital pending satisfactory explanation of her conduct in relation to two matters that were then known to it. The primary matter of concern was always whether the applicant on 28 October 2014, self-cannulated and self-administered an iron infusion whilst an anaesthetised patient of hers was being operated on by a surgeon (the iron infusion incident), and this was the most substantial issue of factual dispute during the trial. On her case she was singled out, and unlawfully discriminated against, on the basis that whilst she accepted that she received the iron infusion, there were other persons in the operating theatre at the time who were knowingly concerned in and a party to it and were not the subject of an investigation by the respondent or any subsequent suspension or form of disciplinary conduct. 4 The applicant failed to make out that case. I concluded that whilst there might have been some discussion with other colleagues about the need for and the possibility of receiving an iron infusion, it was the applicant who acted alone to implement the procedure. I concluded on the evidence that this conduct amounted to a significant and serious departure from the standards of practice expected of a consultant anaesthetist at the time. This is not a case for any apportionment of costs by reference to factual issues on which the applicant succeeded. Further, there is no merit in the submission that the respondent's conduct prolonged the proceeding or was inefficient. 5 Thus the event, which primarily informs the exercise of my costs discretion, is that the applicant failed to establish that the respondent engaged in unlawful discriminatory conduct, breach of contract, breach of trust or any other of the myriad of claims that were pleaded and actively pursued in the course of the proceeding. It follows therefore that the applicant must pay the respondent's costs at least as between party and party. 6 The respondent in support of its application for an indemnity costs order submits that one is justified because the applicant made multiple unsubstantiated allegations of fraud, and other forms of misconduct, against it and a large number of individuals said to be associated with it. I concluded in my primary reasons that there was no evidentiary basis for the making of these allegations and, in some respects, they were scandalous. The respondent also relies upon the fact that the applicant pursued multiple claims of breach of contract, denial of procedural fairness, breach of confidence, invasion of privacy, defamation and negligence despite being informed by Steward J, in a separate proceeding, that these claims had no reasonable prospect of success: Pathmanathan v Healthscope Operations Pty Ltd [2020] FCA 65 (Healthscope). 7 The making of unsubstantiated allegations of fraud, groundless contentions or claims that have no reasonable prospect of success may attract an indemnity costs order: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 232-233, per Sheppard J. However, much depends on the circumstances. It does not follow that because unproven fraud claims are made that indemnity costs must follow. I concluded in my primary reasons that none of the applicant's fraud claims were made out and most were scandalous. The fraud contentions were prolix, multi-faceted and asserted against the respondent, the Medical Board of Western Australia, AHPRA and many individuals who were not parties to the proceeding. Objectively the fraud allegations should not have been made. They were baseless and acting reasonably the applicant ought to have appreciated as much. 8 Similarly the applicant's multiple causes of action, apart from the unlawful discrimination claims, were factually or legally without merit. For a self-represented litigant that circumstance alone may not warrant an indemnity costs order but this case is different. In Healthscope, Steward J struck out as failing to disclose a reasonable cause of action similarly framed claims, then made by the applicant relating to another hospital, of breach of contract, denial of procedural fairness, breach of confidence, invasion of privacy, defamation and negligence. In summarily dismissing the applicant's proceeding, his Honour stated at [119]: Before concluding these reasons for judgment, I wish to make the following observations. I accept that the Doctor has been personally wounded by the consequences which have flowed from the Event. I have no reason to doubt that the Doctor feels deeply aggrieved and therefore desires a remedial response. However, not every perceived grievance visited upon a person translates into a cause of action in law. As I have previously said, bringing a suit in person is a serious matter – it requires an arguable factual and legal foundation. It should be steadily borne in mind that there are necessary limitations on what may properly be adjudicated on by a Court. 9 Before me, the applicant frankly conceded that although she had "probably" read this judgment she did not give consideration to it in pleading her case against the respondent in this matter. Earlier Steward J provided direction to the applicant as to how her claims against the respondent should be framed when he granted leave nunc pro tunc for her to commence this proceeding: Pathmanathan v St John of God Healthcare Inc [2019] FCA 1460 (leave judgment) at [22]-[23]: The Doctor has otherwise made a very great number of accusations in support of her claims that she has been unlawfully discriminated against. The overwhelming bulk of the affidavit material and exhibits filed by her has, I find, been irrelevant, misconceived, inadmissible and/or scandalous. This has included emotive assertions and the opinions of other medical practitioners about what happened. None of that material has been of any assistance to me. This is not meant as a criticism of the Doctor. She is not legally qualified. Moreover, she has plainly been wounded by the Event and its consequences. What the Court needs to know is: (a) what happened at the Event; (b) what followed from the Event; and (c) the reasons why action was taken against the Doctor. This would include knowing why action was not taken against other medical staff who attended in theatre during the Event. I have not otherwise seen in the material before me any further realistic basis for concluding that SJOG unlawfully discriminated against the Doctor. 10 The applicant did not proceed in that way, as I explained in detail in my primary reasons. Her 24 filed affidavits comprised thousands of pages of repetitive, irrelevant and often scandalous material. Her reply pleading extended to 341 pages. There is no doubt that the failure to confine the claims of unlawful discrimination to the facts relevant to the iron infusion incident very considerably increased the length and complexity of the proceeding. The fact that I did not make a finding that the applicant deliberately gave false evidence is not presently to the point: objectively the applicant should not have proceeded as she did, more so in light of the observations of Steward J. 11 An award of costs on an indemnity basis is exceptional and is only justified where there is some feature of the particular case that sets it apart from the usual party and party award. The focus of the inquiry is usually whether the conduct of the party from whom indemnity costs are sought was plainly unreasonable and not simply whether the claim lacked any reasonable prospect of success: MGICA (1992) Pty Ltd v Kenny & Good Pty Ltd (No 2) (1996) 70 FCR 236 at 240, per Lindgren J. In the case of self-represented litigants, there is a reluctance to make indemnity costs orders for the obvious reason that, generally speaking, individuals in that position lack objectivity, do not understand the legal process and are imbued with a sense of personal grievance. For such persons, litigation is the chance to ventilate their concerns to obtain the justice which is claimed to fit their case. Self-represented litigants should not suffer an indemnity costs order on account of those factors alone. 12 Although the respondent seeks an indemnity order for the whole of its costs, there is a principled basis for a partial indemnity order to reflect the degree of unreasonable conduct and its impact on the length and costs of the proceeding: King v Yurisich (No 2) [2007] FCAFC 51. As explained by the Full Court in that case (at [19]-[21]) an order of that type may be expressed as a percentage, by reference to a stage of the proceeding or to reflect a defined number of trial days. 13 In my view this is an appropriate case to exercise my discretion to make a partial indemnity costs order against the applicant. Whilst I accept the respondent's submissions (and I find accordingly) that the applicant made many unfounded allegations of fraud, framed numerous claims despite the clear views of Steward J and acting reasonably should have confined her claim to the basal facts relevant to the discrimination claims, what is clear from the history of this proceeding and the manner of the conduct of the trial is that this was always going to be a long and factually diverse case even in the absence of the fraud claims and the multiple misconceived causes of action. The length and complexity of the proceeding is not wholly or even substantially due to the considerations which favour an indemnity costs order. Justice Steward in the leave judgment found that the applicant's contentions were "sufficiently arguable": [16]. The applicant's claims that she suffered unlawful discrimination were broadly cast, involved much evidence and analysis and to that extent her claims were not unreasonably framed or pursued. 14 In the circumstances, I favour a broad brush approach as dissection and separation of the claims that were arguable from those that were not is simply not practicable. In my view the claims that were not arguable and which were unreasonably framed and argued together with the baseless allegations of fraud occupied not less than 30% of the entirety of the proceeding. 15 I conclude therefore that the applicant should pay 30% of the respondent's costs on an indemnity basis, expressed as a percentage of the global amount of the respondent's costs, and the balance of the respondent's costs should be assessed as between party and party. This is clearly a case where those sums are appropriately assessed each in a lump sum pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth). 16 I order as follows: 1. The applicant is to pay the respondent's costs of the proceeding assessed as to 30% of the respondent's total costs on an indemnity basis and the balance as between party and party. 2. The respondent's costs are to be assessed by a Registrar of the Court on a lump sum basis pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth). I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McElwaine. Associate: Dated: 21 July 2023