Supreme Court New South Wales Medium Neutral Citation: Burns v Corbett [2018] NSWSC 1347 Hearing dates: Dealt with on the papers in Chambers Date of orders: 04 September 2018 Decision date: 04 September 2018 Jurisdiction: Common Law Before: Campbell J Decision: No order as to costs to the intent that each party will bear his or her own costs of the proceedings in the Common Law division Catchwords: COSTS – motions dismissed – general rule – whether complaint was brought in public interest – whether there was a delay by a party – federal diversity argument – whether the matter was an appeal for the purpose of the Suitor's Fund Act 1951 (NSW) – substance over procedure – parties pay own costs Legislation Cited: Anti-Discrimination Act 1977 (NSW), ss 49ZT,114 Civil Procedure Act 2005 (NSW), s 98 Service and Execution of Process Act 1992 (Cth) Suitors' Fund Act 1951 (NSW), ss 2, 2A, 6, 6C Uniform Civil Procedure Rules 2005 (NSW), rr 1.21, 28.2, 42.1 Cases Cited: Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Pty [1951] 1 All ER 873; Burns v Corbett [2018] HCA 15; 92 ALJR 423; Burns v Corbett [2017] NSWCA 3; 316 FLR 448; Burns v Corbett [2016] NSWSC 459; Jones v Trad (No 3) [2013] NSWCA 463; Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11; Ruddock v Vadarlis (No 2) (2001) 115 FCR 229; Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co (No 2) [1953] 1 WLR 1481; Tu v University of Sydney (No 2) [2002] NSWADTAP 25 Texts Cited: Nil Category: Costs Parties: Gary Burns (Plaintiff) Tess Corbett (Defendant) Representation: Counsel: K Madgwick (Plaintiff) J Loxton (Defendant) Solicitors: Allens (Plaintiff) Robert Balzola & Associates (Defendant) File Number(s): 2014/280109 Judgment 1. The plaintiff commenced proceedings charging the defendant with contempt of court. The statement of charges contained two counts based on non-compliance with a judgment of this court entered on 24 September 2014. This judgment was entered under s 114 of the Anti-Discrimination Act 1977 (NSW) ("Anti-Discrimination Act") facilitating the enforcement of non-monetary orders made under that Act by, so far as is presently relevant, the New South Wales Civil and Administrative Tribunal ("NCAT"). Under s 114 a certificate of the Registrar of NCAT, of the making of its orders once filed in the Registry of this court, operates as a judgment of the court. 2. In circumstances that it is unnecessary to state the defendant did not comply with the judgment and the contempt proceedings which were commenced by a notice of motion came before me for hearing on 15 April 2016. 3. The defendant defended the charges by impugning the validity of NCAT's orders. The first ground of invalidity was that the service of the documents initiating proceedings in the Tribunal was not effected in accordance with the Service and Execution of Process Act 1992 (Cth), the defendant at all material times being a resident of Victoria. 4. The second ground of invalidity related to the interpretation of s 49ZT of the Anti-Discrimination Act. The argument was that the State Act could not apply to public acts of the defendant performed in the state of Victoria. 5. Although the plaintiff was at all material times a resident of this State, no objection to the Tribunal's jurisdiction was advanced on a ground arising out of the High Court of Australia's federal diversity jurisdiction. 6. The factual basis for the defence was founded on the defendant's affidavit of 1 March 2016. The defendant did not appear on 15 April 2016 in compliance with the requirement that she attend for cross-examination. When her counsel sought to read the affidavit counsel for the plaintiff objected and the defendant was forced to apply for an adjournment which I granted. 7. In my judgment granting the adjournment ([2016] NSWSC 459 at [19]) I made the following observation: "The application for costs is a strong one. However, given the misunderstanding between solicitor and client, I am of the view that I should reserve costs until the defendant attends to give evidence and is given an opportunity of offering her own explanation, if she wishes to do so, for her non-attendance today. I repeat, the merit of the plaintiff's application is obvious but for the single reason expressed I will reserve the question of costs." 1. When the hearing resumed before me on 4 May 2016 I raised with the parties the question of whether the Tribunal could exercise the federal diversity jurisdiction. Counsel required time to consider the matter. On 26 July 2016 under r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") I ordered the questions relating to the Tribunal's jurisdiction be determined separately before any further hearing of the contempt charges and under r 1.21 I removed those questions to the Court of Appeal. 2. The federal diversity question was answered adversely to the plaintiff by the Court of Appeal ([2017] NSWCA 3; 316 FLR 448) on further appeal to the High Court, the Court of Appeal's decision was upheld, albeit, the reasoning was somewhat different: Burns v Corbett [2018] HCA 15; 92 ALJR 423. 3. When the hearing resumed before me following the High Court appeal on 9 May 2018 the motion of each party was dismissed by consent and at the request of the parties I made directions as to the filing of written submissions as to costs. This is my decision as to costs. Plaintiff's submission 1. Solicitor for the plaintiff, Mr Martignoni, raised three specific points in his written submissions. First, that the plaintiff brought the complaint in the public interest. Secondly, that the defendant's failure to bring forward the federal diversity argument resulted in delay and created unnecessary costs in the proceedings. And finally, if I were unpersuaded and costs were to be awarded against the plaintiff, then the plaintiff should have a certificate under s 6 of the Suitors' Fund Act 1951 (NSW) ("Suitors' Act"). Public interest 1. Mr Martignoni submits there is a great public interest in upholding the rule of law, and that the Court is obliged to have regard to "the chilling effects" of a costs order made against an individual complainant who is effectively making a complaint in the public interest, in a jurisdiction that seeks to protect and provide the observance of fundamental human rights: Tu v University of Sydney (No 2) [2002] NSWADTAP 25 at [39]. In support of this public interest, Mr Martignoni reminds me that the plaintiff sought a public apology and that this statutory legal remedy offered no financial gain or incentive to the plaintiff personally. Federal diversity argument 1. Secondly, Mr Martignoni submits that the defendant should not be entitled to compensation by an award of costs in these proceedings because the defendant did not raise the federal diversity argument initially, and this resulted in unnecessary costs. Mr Martignoni further raises, counsel for the defendant did not in fact raise this argument until it was mentioned by the Court on 4 May 2016. Mr Martignoni submits the costs involved would have been reduced if the defendant brought the argument forward in a timely manner. 2. If I were not persuaded by this ground, Mr Martignoni argues a successful party may recover only a proportion of its costs if its conduct at trial was such as to unreasonably prolong the proceedings: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [11] and [15]. Suitors' Fund Act 1. Finally, Mr Martignoni raises the point that if costs are ordered against the plaintiff then they ought to be given a certificate under the Suitors' Act. Section 6 of the Suitors' Act invests power in the Supreme Court to grant an unsuccessful respondent to an appeal an indemnity certificate in respect of the costs of the appeal. An indemnity certificate entitles the respondent to be paid a sum from the Suitors' Fund to offset the costs awarded against him or her. 2. Mr Martignoni submits that these proceedings are akin to an appeal as they arise out of a mistaken view of the law on part of the Appeal Panel, NCAT in these proceedings, and consequently the matter ought to be considered an appeal for the purposes of the Suitors' Act: s 2(1). 3. Further to this, Mr Martignoni explains the plaintiff is not financially able to satisfy any costs order made against him, and urges this to be a consideration. Defendant's submission 1. Solicitor for the defendant, Mr Balzola submits that the defendant is entitled to costs. In written submissions he acknowledges costs are in the discretion of the Court: s 98 Civil Procedure Act 2005 (NSW) ("Civil Procedure Act"), and invokes the rule that unless another order should be made, the usual order is that costs follow the event: UCPR 42.1. Entitlement to costs 1. The importance of judicial consistency is drawn upon by Mr Balzola, by invoking his Honour, Mason CJ in Smeaton Hanscomb & Co Ltd v Sassoon I Setty, Son & Co (No 2) [1953] 1 WLR 1481 at 1481, where his Honour outlined the importance of the result in litigation in guiding an arbitrator's discretion as to costs. 2. Mr Balzola also refers to the judgment of McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 ("Oshlack") at para 69, where his Honour recounts the relevant principle from Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Pty [1951] 1 All ER 873 at 874 as follows: "The ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct." His Honour further details the scenarios whereby a Court is permitted to depart from the usual order as to costs, and they are as follows: first, when the successful party by its lax conduct effectively invites the litigation; secondly, when the successful party unnecessarily protracts the proceedings, thirdly when the successful party succeeds on a point not argued before a lower court; fourthly, when the successful party prosecuted the matter for the sole purpose of increasing costs that are recoverable; and finally, when the successful party obtains relief which the unsuccessful party had already offered in settlement. Reserved cost 1. Mr Balzola submits the reserved costs should be awarded to the defendant because the High Court and the Court of Appeal both found it was unnecessary for the defendant to attend Court on 15 April 2016 notwithstanding the fact the plaintiff was seeking an adjournment. These findings were based on the fact the defendant would have had to travel from Western Victoria to New South Wales, and this was not feasible because the defendant is a pensioner. Public interest 1. Mr Balzola acknowledges the heart of litigation is the public interest, however, he rejects the plaintiff's proposition that the public interest aspect of this case entitles the Court to depart from the general rule, because the plaintiff pursued this claim out of a personal interest: cf Jones v Trad (No 3) [2013] NSWCA 463 at [21]. Federal diversity argument 1. Mr Balzola submits that the federal diversity argument was first enlivened when the issue was brought to this Court. This forum choice was made by the plaintiff, and it is therefore safe to accept the plaintiff would shoulder the risk of the question of jurisdiction being reopened. To put it simply, the strike out application of the contempt proceedings was a foreseeable consequence of the plaintiff's own action in bringing the proceedings to this Court. Mr Balzola then submits that, as a result of the plaintiff's action the onus lay with the plaintiff to show the Court has jurisdiction, and the power to hear and determine the matter. In short, the defendant argues that the fact she did not raise the federal diversity argument earlier is of no relevance because she did not bear the obligation to assist the Court. Consequently, any delay was not a delay caused by the defendant. Suitors' Fund Act 1. The defendant acknowledges if the Court takes the view that the defendant's action in substance has had the effect of an appeal, the Court can issue a certificate under s 6 of the Suitors' Fund Act. The defendant, however, submits if it the Court is not persuaded because the action does not strictly form an appeal the plaintiff is entitled to apply for a sum of no more than $10,000: s 2A Suitors' Fund Act. If the Court takes this view, s 6C of the Suitors' Fund Act may apply. This provision provides if a party is liable to pay costs and the party is not entitled to a payment from the Suitors' Fund, the Director-General may, with agreement of the Attorney General, pay from the Suitors' Fund such monies towards the costs, as assessed in the circumstances. Decision 1. The Court is empowered to determine by whom and to whom costs will be awarded: s 98 Civil Procedure Act. I am conscious that, this judicial discretion is not unqualified and cannot be exercised capriciously. This broad judicial power must be exercised in accordance with the well-established principle and factors that are directly connected with the litigation: Oshlack. This balancing exercise is guided by a variety of principles, not the least of, which underpin the usual order. This includes the consideration that the successful party should be compensated for the expense incurred in bringing or defending the case as the case may be. There are principal exceptions to the general rule. 2. In relation to the first issue of public interest, I acknowledge the vilification of persons for gender, race or sexuality, as is in this case, generally or specifically, has been condemned as unlawful. The defendant claims the plaintiff pursued the proceedings on a personal basis. Regardless of the frequency of the plaintiff pursuing complaints like this, there is no factual basis put forward by the defendant to support that the only reason for pursing it is personal. On this basis, I am not satisfied that the plaintiff only pursued the proceedings on a personal basis. However, it is important to note, public and personal interests are not mutually exclusive; they can, and commonly do, align. Whether in this case I should apply a public interest exception to the usual order should be evaluated by reference to the decision actually made. The plaintiff's case failed because the Court of Appeal and the High Court determined that NCAT has no power to exercise federal diversity jurisdiction. It is difficult to characterise proceedings built on a tribunal determination of no legal effect as brought in furtherance of the rule of law. 3. Moving on to the delay argument, although the plaintiff brought the claim and chose the forum, and therefore bore the onus of proof, there is no duty or legal obligation requiring a plaintiff or any party to make good the defendant's case. Had the defendant raised the critical point at the outset significant costs would have been saved, in particular I would not have embarked upon a hearing on the merits on 15 April 2016. Nor would it have been necessary to adjourn that hearing which resulted in wasted costs. That the point was only identified when the Court raised it subsequently brings the case into a category analogous to McHugh J's third possible exception expressed in Oshlack when a party succeeds on a point not argued before a lower court. 4. I am aware that the defendant obtained an order for costs in her favour in each of the higher courts. However, the considerations at first instance are not identical. As I said in my 2016 judgment the plaintiff had a strong prima facie case for a wasted costs order when the matter was adjourned in April 2016. I stayed my hand then only to give the absent defendant the opportunity to explain her absence. Although there has been no further hearing before me because the proceedings were removed to the Court of Appeal, no explanation has been given for the defendant's failure to attend for cross-examination. It remains that the plaintiff has a strong case for the wasted costs. It is no real answer in the circumstances to say that it was not necessary for the defendant to attend because the proceedings in this Court had misfired. No question of this Court's jurisdiction arises; the question was about NCAT's jurisdiction. 5. Balancing the defendant's overall success with the plaintiff's strong presumptive right to a wasted costs order which would survive an adverse outcome of the proceedings as a whole I think it appropriate to set those considerations off against one another. It is a well-established principal that it is in the Court's discretion to make a costs order that reflects the degree of 'success' enjoyed by each party. It is also, however, widely accepted that there is a necessity for practical justice to prevail over fixed rules of procedure. On that basis, considering all the circumstances, it is most appropriate that no order of costs should be made against either party. 6. Given my decision, it is not necessary, nor would it be appropriate to decide whether the Suitors' Fund Act applies. However, I doubt enforcement proceedings of this type would fall within the meaning of 'appeal' notwithstanding the width of the definition in s 2 of that Act. Orders 1. No order as to costs to the intent that each party will bear his or her own costs of the proceedings in the Common Law division. ********** Amendments 05 September 2018 - Paragraphs 11; 12; 13; 14; 15; 16; 17 "Ms Martignoni" amended to "Mr Martignoni" 05 September 2018 - Paragraph 13 "Ms Martignoni" amended to "Mr Martignoni" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 September 2018