Federal Discrimination Law: Chapter 8 - Costs Awards

Chapter 8 Costs
Awards

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• 8.1 Introduction
  • 8.1.1 General discretion applies
  • 8.1.2 Power to limit and set costs
    • (a) The rationale for the rule
    • (b) Factors to consider when determining whether or not to make an order limiting costs
  • 8.1.3 Limitation on amount of costs that can be awarded in the Federal Court
  • 8.1.4 Scale of costs in FMC proceedings
• 8.2 Usual Principles of Costs to Apply
• 8.3 Factors Considered
  • 8.3.1 Where there is a public interest element
    • (a) What is a ‘public interest element’
    • (b) Cases in which the public interest element has been held to be sufficient to depart from the usual costs rule
    • (c) Cases in which the public interest element has been held not to be sufficient to depart from the usual costs rule
• 8.3.2 Unrepresented applicants
  • 8.3.3 The successful party should not lose the benefit of their victory
  • 8.3.4 Courts should be slow to award costs at an early stage
  • 8.3.5 Unmeritorious claims and conduct which unnecessarily prolongs proceedings
  • 8.3.6 Applicant only partially successful
• 8.4 Applications for Indemnity Costs
  • 8.4.1 General principles on indemnity costs
  • 8.4.2 Offers of compromise
    • (a) Calderbank offers in unlawful discrimination cases
• 8.5 Application of s 47 of the Legal Aid Commission Act 1979 (NSW) to Human Rights Cases in the FMC

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8.1 Introduction

8.1.1 General
discretion applies

There are no specific provisions
relating to costs in unlawful discrimination proceedings before the Federal
Magistrates Court (‘FMC’) and Federal Court. The courts have a
general discretion to order costs under the provisions of the Federal Court
Act 1976 (Cth) (‘the Federal Court Act’) and the
Federal Magistrates Act 1999 (Cth) (‘the Federal Magistrates
Act’).^[1]

The Federal Court and FMC generally exercise those powers according to the
principle that costs follow the event (see further 8.2
below).^[2] Under
that principle, an unsuccessful party to litigation is ordinarily ordered to pay
the costs of the successful party. However, the FMC and Federal Court may depart
from this approach in appropriate circumstances. For example, courts have
exercised their discretion to deprive a successful party of costs where:

• the successful party has only succeeded in a portion of her or his
  claim;^[3]
• the costs of the litigation have been increased significantly by reason of
  the need to determine issues upon which the successful party has
  failed;^[4]
• the successful party has unreasonably or unnecessarily commenced, continued
  or encouraged the litigation or has acted
  improperly;^[5]
  or
• the character and circumstances of the case make it inappropriate for costs
  to be ordered against the unsuccessful
  party.^[6]

The
manner in which the Federal Court and FMC have applied these and other
principles in unlawful discrimination cases is considered below (see 8.3).

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8.1.2 Power to
limit and set costs

The Federal Court has the power
pursuant to O 62A of the Federal Court Rules (Cth) (‘Federal Court
Rules’) to specify the maximum costs that may be recovered on a
party-party
basis.^[7] The
Court may vary the amount recoverable where there are ‘special
reasons’ and it is ‘in the interests of justice to do
so’.^[8]

The FMC has a similar rule. Rule 21.03 of the Federal Magistrates Court
Rules 2001 (Cth) (‘FMC Rules’) enables the FMC to specify the
maximum costs that may be recovered on a ‘party-party’ basis by
order at the first court date. Such an order may be made on application by a
party or on the Court’s own motion. The Court may subsequently vary the
maximum costs specified if there are ‘special reasons’ and ‘it
is in the interests of justice to do
so’.^[9]

Any order made pursuant to these rules must apply in favour of both parties
and cannot be made solely for the benefit of one party to the
proceedings.^[10]

The order will not, however, necessarily apply to all of the costs in the
proceedings.^[11]
Order 62A rule 2 provides that any amount specified in such an order will not
include costs that a party has been ordered to pay because they have:

(a) failed to comply with an order or with any of these Rules; or

(b) sought leave to amend its pleadings or particulars; or

(c) sought an extension of time for complying with an order or with any of
these Rules; or

(d) otherwise caused another party to incur costs that were not necessary for
the economic and efficient:

(i) progress of the
proceedings to trial; or

(ii) hearing of the action.

Rule 21.03(2) of the FMC Rules is similar and provides:

(2) ...an amount specified must not include an amount that a party is ordered
to pay because the party:

(a) has failed to comply with, or has sought an extension of time for
complying with, an order or with any of these Rules; or

(b) has sought leave to amend a document; or

(c) has otherwise caused another party to incur costs that were not necessary
for the economic and efficient progress of the proceeding or hearing of the
proceeding.

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(a) The
rationale for the rule

The reason behind the introduction
of O 62A of the Federal Court Rules was concern ‘that within the wider
community and the legal profession, how the cost of litigation, particularly for
a person of ordinary means, places access to the civil courts beyond their reach
and thus effectively denies them
justice’.^[12]
In Flew v Mirvac Parking Pty
Ltd^[13]
(‘Flew’), Barnes FM said that this concern did not apply
with as much force to the FMC because the FMC handled less complex matters and
it had provision for costs to be calculated in accordance with a pre-set
scale.^[14]

In Hanisch v Strive Pty
Ltd,^[15]
Drummond J considered the primary purpose of the rule stating that the

principal object of O 62A is to arm the Court with power to limit the
exposure to costs of parties engaged in litigation in the Federal Court which
involves less complex issues and is concerned with the recovery of moderate
amounts of money, although it may be appropriate for an order to be made under O
62A in other cases, of which Woodlands v Permanent Trustee Co Ltd (1995)
58 FCR 139 is an example.

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(b) Factors
to consider when determining whether or not to make an order limiting
costs

In Corcoran v
Ferguson^[16]
(‘Corcoran’) Bennett J considered an application for an
order pursuant to O 62A limiting the amount of costs that would be payable by
applicants to unlawful discrimination proceedings.

Bennett J held that when determining whether to make an O 62A order the court
had to consider whether there was anything about the particular proceedings to
persuade it that it was appropriate to depart from the usual order that a
successful party is entitled to their
costs.^[17]

Her Honour considered the following factors to be relevant to determining
whether to make an order and what type of order to
make:^[18]

(a) the timing of the application;

(b) the complexity of the factual or legal issues raised in the
proceedings;

(c) the amount of damages that the applicant seeks to recover and the extent
of any other remedies sought;

(d) whether the applicant’s case is arguable and not frivolous and
vexatious;

(e) whether, in the absence of an order the applicant may discontinue or be
inhibited from continuing;

(f) whether there is a public interest element to the case;

(g) whether the respondent could continue with the proceedings if an order
was made;

(h) the financial position of the applicant;

(i) the likely costs to be incurred by the parties in the
proceedings.

In relation to point (e) her Honour rejected the
argument made by Virgin Blue that the applicants needed to show they would be
forced to abandon the
proceedings.^[19]
Nonetheless, Her Honour expressed the view that ‘mere concern as to the
effect of an adverse costs order on a party’s asset position, or a concern
that a party may become bankrupt if unable to meet a costs order are not, by
themselves, factors that sufficiently render the applicants’ position
different from other litigants faced with the usual costs
order’.^[20]

In relation to point (f) Her Honour expressed a similar view to that taken in
other cases, namely, that whilst the existence of a public interest in
proceedings is a factor of some importance when determining costs issues, it
will not, even when accompanied by an arguable case, necessarily be sufficient
to warrant a departure from the usual costs
order.^[21]

Her Honour held that the combination of the following factors warranted
making an order fixing costs in this
case:^[22]

• the application for the order limiting costs was made reasonably early in
  the litigation;
• the applicants did not claim any personal financial reward;
• the applicants’ case was arguable and not frivolous;
• there was a public interest in the subject matter of the proceedings –
  the questions raised in the case had not previously been considered and raised
  novel issues the determination of which will impact on the ability of disabled
  persons to fly with Virgin;
• if an order was not made the applicants may discontinue the litigation or at
  least be inhibited from continuing;
• there was no suggestion that Virgin could not afford financially to continue
  with the proceedings if the proposed order was made.

In reaching the
decision as to the amount at which to limit costs, Her Honour took into account
the likely costs of the proceedings and the financial position of the parties.
Taking these matters into account her Honour decided to make a different order
in respect of the two applicants. In the case of Mr Ferguson, who was unemployed
and in receipt of a disability support pension, Her Honour limited the costs
payable by either party in those proceedings to $15,000, an amount representing
the legal aid indemnity. In the case of Mr Corcoran, whose income and asset
position was considered to be ‘reasonably substantial,’ her Honour
did not consider it appropriate to limit costs to $15,000 and fixed the costs
payable by either party to
$35,000.^[23]

Further, in accordance with O 62A r 2, her Honour expressly provided in the
orders that the maximum amount of costs excluded:

• all costs incurred prior to the dates on which the Notices of Motion seeking
  the O62A orders were filed;
• all costs associated with amendments to the Applicants’ Points of
  Claim; and
• consequential amendments to the defence or the provision of particulars that
  make clear the Applicants’ claims.

The approach taken by
Bennett J is substantially the same as that taken by the Federal Magistrates
Court to the application of r 21.03 of the FMC
Rules^[24] and
to the Federal Court in other types of
proceedings.^[25]

An additional factor that is relevant to applications made in the FMC that is
not relevant to applications for such orders made in Federal Court proceedings
is the fact that the FMC, unlike the Federal Court, was established to handle
less complex matters and makes provision for costs to be calculated in
accordance with a pre-set scale. As such, in Flew Barnes FM held that the
concern about the costs of litigation were not as significant as they were in
the case of Federal Court matters and this was a factor to be taken into account
when determining applications pursuant to r
21.03.^[26]

In making an order for costs in a proceeding once it has been determined, the
FMC may also set costs rather than, for example, referring the costs for
taxation.^[27]
For example, in Escobar v Rainbow Printing Pty Ltd (No
3),^[28]
Driver FM decided the application for costs by the successful applicant as
follows:

Generally in human rights proceedings before this Court a simple costs order
would lead to the application of the fixed event based costs scale in schedule 1
to the Federal Magistrates Court Rules 2001 (Cth) (‘the Federal
Magistrates Court Rules’). The application of that scale in these
proceedings would lead to an outcome of costs and disbursements in the order of
$18,000, including today's costs hearing.

It seems to me that in the context of these proceedings that would be an
excessive amount to award in favour of the applicant and I have decided instead
to fix the amount of costs payable pursuant to rule 21.02(2)(a) of the Federal
Magistrates Court Rules. I have decided that I should make an award of costs and
disbursements pursuant to that rule in the sum of $12,000, which is
approximately two-thirds of the amount which the applicant would have received
by a strict application of the costs schedule.

I am satisfied that that is a reasonable outcome in terms of the costs that
were likely to have been incurred on behalf of the applicant and in terms of the
nature and conduct of the proceedings which, while involving a significant body
of evidence, dealt with what was ultimately a relatively straight forward
issue.^[29]

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8.1.3 Limitation
on amount of costs that can be awarded in the Federal
Court

If costs awarded in the Federal Court are taxed
then O 62 r 36A of the Federal Court Rules provides for any award of costs to be
reduced by one-third if either:

• a party is awarded judgment for less than $100,000 on a claim for a money
  sum or damages (unless a judge or Court orders otherwise) (O 62 r 36A(1));
  or
• the Court or a judge declares that a proceeding could more suitably have
  been brought in another court or tribunal (O 62 r 36A(2)).

This rule
is particularly relevant in discrimination cases where damages awards are often
less than
$100,000.^[30]
It is also open to a Federal Court judge to find that a discrimination case
could more suitably have proceeded in the Federal Magistrates Court.

In cases where an award of damages is less than $100,000 the court retains a
discretion to order that costs not be reduced in accordance with the rule. As,
however, such an order can only be made by the court or a judge and not a taxing
officer, a party that is awarded damages of less than $100,000 that does not
want their costs reduced on taxation must apply to the court for an appropriate
order.^[31]

In LED Builders Pty Ltd v
Hope^[32]
Tamberlin J cautioned against applying O 62 r 36A(1) automatically
stating:

In my opinion r 36A, unless applied with discretion and caution can lead to
harsh results. Especially is this so in relation to claims for small monetary
amounts in matters such as copyright. If the rule is allowed to apply
automatically in all cases where a sum, less than $100,000, is recovered, this
can lead to harsh results in situations where there is no other more appropriate
court. ^[33]

Matters that courts have taken into account when deciding not to order costs
to be reduced include:

• the complexity and importance of the issues raised by the
  matter,^[34]
• whether relief, other than damages, such as injunctive relief was sought and
  granted;^[35]
  and
• whether the proceedings could have been brought in any other
  court.^[36]

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8.1.4 Scale of
costs in FMC proceedings

Rule
21.10 of the FMC Rules provides that, unless the Court orders otherwise, where a
costs order is made the amount of costs are to be determined in accordance with
the scale of costs set out in Part 1 of Schedule 1 to the Rules. However, if
costs are taxed then the relevant scale of costs is that set out in Schedule 2
to the Federal Court
Rules.^[37]

In Hinchliffe v University of Sydney (No
2),^[38] Driver FM said the
following about the application of the scale of costs to unlawful discrimination
proceedings:

Ordinarily, in human rights proceedings, costs are assessed in accordance
with the event based scale appearing in schedule 1 to the Federal Magistrates
Court Rules. That scale was adopted by the Court in order to provide simplicity
and certainty in determining issues of costs. In some cases, as is likely to be
the case here, a successful party will incur significantly more in costs than is
recoverable pursuant to the Court scale. It does not follow that that is an
unjust result, where it occurs. The Court scale is publicly known and parties to
litigation should be aware that the scale is likely to determine their maximum
recoverable costs should they succeed. If parties wish to incur significantly
more costs in litigation in this Court than they could ever recover, that is a
matter for them.

In any event, it should not be assumed that because substantial legal costs
have been incurred by a party, their money has been well and wisely spent. The
scale of costs ordinarily applicable in human rights proceedings reflects the
Court's assessment of what costs can be accepted as reasonable in ordinary
proceedings. If proceedings are exceptionally long or complex there is the
opportunity to ask for the proceedings to be transferred to the Federal Court,
where a more appropriate scale of costs for long and complex proceedings would
be available. That was not done in this case.

An additional factor is that there is commonly a disparity between an
applicant and a respondent in human rights proceedings in their relative
capacity to fund the legal proceedings. This applicant was legally aided but
commonly applicants must depend upon their own limited financial resources.
Commonly, a respondent will have access to significantly more funds than an
applicant. This Court's event based costs scale establishes a level playing
field. I see no reason to depart from it in these proceedings.
^[39]

In Ingui v Ostara (No
2),^[40]
Brown FM reduced the amount of costs that would be awarded under the scale of
costs (which together with disbursements amounted to $4,694) to $3,000 on the
grounds that $4,694 was excessive given the proceedings were discontinued well
before the matter was fixed for final hearing, thus saving the respondents from
incurring considerable costs.

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8.2 Usual
Principles of Costs to Apply

In the first year following
the transfer of the federal unlawful discrimination jurisdiction to the FMC and
Federal Court, there was an acceptance by some Federal Magistrates that the
nature of the jurisdiction may warrant a departure from the traditional
‘costs follow the event’
rule.^[41]
It would seem now, however, that the weight of authority in the Federal Court
and FMC is to the effect that the usual principles relating to costs are to be
applied.

In Minns v New South Wales (No
2),^[42]
Raphael FM reconsidered his decision in the earlier case of Tadawan v South
Australia^[43]
and concluded:

The decision in Tadawan was always meant to be one made on its own
facts and it has not been universally followed in the Federal Magistrates Court.
To the extent that it may be considered a precedent for the non-imposition of
costs orders in ‘deserving cases’ this should no longer continue. I
am satisfied that the superior courts have now made it clear what the law should
be in relation to such applications in the anti-discrimination area and I am
content to follow
them.^[44]

In reaching this view, his Honour made reference to decisions in other
unlawful discrimination matters and other cases which raised ‘public
interest’
issues.^[45]

In a range of other cases, the Federal Court and FMC have confirmed that the
general rule that ‘costs follow the event’ will apply in unlawful
discrimination
matters.^[46]

For example, in Fetherston v Peninsula Health (No
2),^[47]
Heerey J explicitly rejected the argument that normal costs principles should
not apply to cases brought under the HREOC Act and affirmed the general rule
that ‘a wholly successful defendant should receive his or her costs unless
good reason is shown to the
contrary’.^[48]
His Honour stated:

While the Disability Discrimination Act is without doubt beneficial
legislation, its characterisation as such does not mean that this Court is to
apply any different approach as to costs. In conferring jurisdiction under a
particular statute Parliament may conclude that policy considerations warrant a
special provision as to costs, for example that there be no order as to costs or
that costs only be awarded in certain circumstances, such as, for example, where
a proceeding has been instituted vexatiously or without reasonable cause:
Workplace Relations Act 1996 (Cth) s 347. The absence of any such
provision applicable to the present case confirms that the usual principles as
to costs are to apply. ^[49]

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8.3 Factors
Considered

Some of the factors that have been identified
in federal unlawful discrimination cases as being relevant to the discretion to
order costs
include:^[50]

• where there is a public interest element to the complaint;
• where the applicant is unrepresented and not in a position to assess the
  risk of litigation;
• that the successful party should not lose the benefit of their victory
  because of the burden of their own legal costs;
• that litigants should not be discouraged from bringing meritorious claims
  and courts should be slow to award costs at an early stage;
• that unmeritorious claims and conduct which unnecessarily prolongs
  proceedings should be discouraged; and
• whether the applicant was only partially successful.

Each of
these matters will be considered in turn.

In cases where interlocutory relief is sought, different considerations apply
in relation to the award of
costs.^[51]
Where an application for interlocutory relief succeeds, the usual order is that
the costs either be costs in the cause or that costs be
reserved.^[52]
However, where an application for interlocutory relief is refused and dismissed,
it may be appropriate that the applicant pay the respondent’s costs of and
incidental to the application for interlocutiory
relief.^[53]

It is also noted that self-represented applicants are not entitled to any
legal
costs.^[54]

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8.3.1 Where
there is a public interest element

A factor that may
warrant a departure from the usual rule that costs will follow the event is in
cases where there is a significant public interest
element.^[55]

(a) What
is a ‘public interest element’

The term
‘public interest’ is not judicially defined. In determining whether
a matter has a public interest element, a court may consider all the
circumstances of the case to determine whether there is sufficient ‘public
interest’ to influence the exercise of the court’s discretion as to
costs.^[56] In
Ruddock v Vadarlis (No
2),^[57]
Black CJ and French J cautioned against advancing an argument against cost
orders solely on the basis that the proceedings are ‘public interest
litigation’ or are proceedings brought in the ‘public
interest’. In this regard their Honours referred to the cautionary
comments of Gaudron and Gummow JJ in Oshlack v Richmond River
Council,^[58]
that the term ‘public interest litigation’
is a ‘nebulous concept unless given...further content of a legally
normative
nature’.^[59]
Their Honours went on to say:

To say of a proceeding that it is brought ‘in the public
interest’ does not of itself expose the basis upon which the discretion to
award or not award costs should be exercised. ^[60]

In Access For All Alliance (Hervey Bay) Inc v Hervey Bay City
Council,^[61]
the Federal Court held that a human rights and/or discrimination case will not
automatically be regarded as a proceeding in the public interest.

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(b) Cases
in which the public interest element has been held to be sufficient to depart
from the usual costs rule

As the cases discussed below
indicate, the following matters have been taken into account when deciding
whether there is a sufficient public interest to warrant the usual costs order
not being made against an unsuccessful applicant:

• that the outcome of the case will have implications for persons beyond the
  applicant, for example, because the decision will be of precedent value or
  because it concerns the operation of a policy or issues that affect persons
  other than the applicant;
• that the applicant’s case was arguable; and
• that a legal practitioner has appeared pro bono for the
  applicant.

It is important to note, however, that the cases
discussed under paragraph (c) below
demonstrate that the presence of one or more of the above matters may not
necessarily be sufficient to warrant a departure from the usual rule as to
costs. Accordingly, the cases should only be used as a guide as to the types of
matters that will and will not warrant a costs order.

In Xiros v Fortis Life Assurance
Ltd^[62]
(‘Xiros’), Driver FM dismissed the application but
declined to award costs to the respondent on the basis of a ‘significant
public interest element’. His Honour stated:

All human rights proceedings contain some element of public interest in that
the legislation is remedial in character, addressing the public mischief of
discrimination. But the legislation confers private rights of action for
damages. There will be many human rights proceedings where no sufficient public
interest element can be shown: Physical Disability Council of NSW v Sydney
City Council [1999] FCA 815.

In the present case, the proceedings have called for the interpretation and
application of s 46(2) of the DDA, a provision on which I have found no previous
judicial consideration.

The decision of this Court will have some precedent value and will have
implications for other insurance policies; and possibly a large number of
similar policies. The proceedings therefore contain a public interest element of
substance.^[63]

Wilcox J commented as follows in Ferneley v The Boxing Authority of New
South
Wales:^[64]

Although the applicant fails, it is not clear to me that she should be
required to pay the respondents’ costs. Her case in relation to s 22 was
arguable. Her argument in relation to s 42, which was disputed by the
respondents, is correct. Perhaps more importantly, the case has served the
public interest in clarifying important issues of discrimination
law.^[65]

In Jacomb v Australian Municipal Administrative Clerical & Services
Union,^[66]
Crennan J accepted that there was an element of public interest in the matter,
and ordered the unsuccessful applicant to pay 75% of the respondent’s
costs.^[67] Her
Honour stated as follows:

There is no set formula for determining whether a case is brought in the
public interest. The decision made in the present proceedings may act as a
useful guide for other unions, whose rules are affected by the operation of s 7
of the Sex Discrimination Act and, to this extent, there is a degree of
public interest in having the dispute judicially determined. However, the
applicant stood to benefit personally from the decision and, in this regard, I
could not be satisfied that the applicant brought the proceeding entirely in the
public interest. The public interest was subservient to, although coincided
with, his own interests. However, it is important to note in this context, that
in the absence of any judicial determination of the question of statutory
construction, to which the facts gave rise, the applicant was not acting
unreasonably in seeking a determination. While it remains undisturbed, the
determination is one which will have the effect of governing the position of
persons who find themselves in a similar position to the applicant. In that
sense the case can be genuinely described as a test case with some element of
public interest. It may be of assistance to the respondent in respect of future
rules and may be of assistance to similar bodies in similar
circumstances.^[68]

In AB v New South Wales (No
2),^[69]
Driver FM considered the issue of costs for an applicant who was unsuccessful in
bringing a claim of indirect racial discrimination in the admission criteria for
a NSW selective High
School.^[70]
Driver FM ordered that there be no order for costs, stating:

the applicant was represented pro bono publico by Mr Robertson. It is
appropriate that the Court should place on record its gratitude to counsel for
his willingness to appear on that basis. Counsel only agrees to appear pro
bono publico where an element of public interest is discerned. As I said in
Xiros v Fortis Life Assurance, there is always an element of public
interest in human right proceedings, given that the legislation is beneficial
and seeking to redress the public mischief of discrimination.

However, ordinarily in human rights proceedings a claimant is exercising a
private right to claim damages. There will frequently be an insufficient public
interest element to outweigh the general principle that costs should follow the
event in such proceedings [see Physical Disability Council of NSW v Sydney
City Council]. I was also taken by Ms Barbaro to a decision of Federal
Magistrate Raphael in Minns v New South Wales (No 2) where His Honour
said, at paragraph 13, that something more than precedent value is required in
order to establish an element of public interest sufficient to warrant a
departure from the ordinary principle that costs follow the event.

In this case, in my view, a combination of the public interest inherent in a
case which is relatively novel and which counsel recognised by appearing pro
bono publico, the fact that there was no claim for damages but simply the
seeking of a right of access to a public school (which raised an issue of public
importance) and the fact that but for the issue of evidence the applicant would
have succeeded, all lead me to the view that there should be no order as to
costs.^[71] (footnotes omitted)

Driver FM appears to accept in this passage the view of Raphael FM in
Minns v New South Wales (No 2)
(‘Minns’)^[72]
that something more than precedent value is necessary to establish a sufficient
public interest.

In Wiggins v Department of Defence – Navy (No
3),^[73]
McInnis FM held that the case had a significant public interest element relevant
in determining
costs.^[74] His
Honour identified the issues of public interest as being:

• the treatment of employees in the armed forces suffering from
  depression;^[75]
• the manner in which the armed forces makes provision for the communication
  to relevant supervising officers of the nature of the condition suffered by an
  officer leading to the classification of fit for shore
  activities;^[76]
  and
• ensuring that serving personnel of the armed forces are provided with the
  opportunity of rehabilitation and advancement of their
  career.^[77]

After
citing those factors, his Honour stated:

In my view, those factors are sufficient to constitute a significant degree
of public interest above and beyond the benefit which the applicant obtains
personally from the decision of the court. In that sense, although the public
interest element in this case coincides with the personal interest of the
applicant, it is still a public interest element of significance which I regard
as relevant to take into account in the exercise of my discretion concerning
costs.^[78]

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(c) Cases
in which the public interest element has been held not to be sufficient to
depart from the usual costs rule

In Xiros, Driver
FM observed that not every case which raises a significant issue and in which
there is an arguable case will avoid the application of the principle that costs
follow the event.

Examples of the matters taken into account when deciding not to depart from
the usual costs rule in public interest cases are:

• the strength of the applicant’s case - in Physical Disability
  Council of NSW v Sydney City
  Council,^[79]
  the unsuccessful applicant was ordered to pay the respondent’s costs
  because even though the case raised important issues the overall prospects of
  the applicant’s case were little better than speculative;
• whether an exclusively personal benefit is sought by the applicant in the
  proceedings - in
  Minns^[80]
  Raphael FM held that where proceedings seek an ‘exclusively personal
  benefit’ (such as damages), the public interest element of a matter is
  ‘much
  diminished’.^[81]
  His Honour also appeared to express views at odds with those expressed by
  Driver FM in Xiros, stating:

if public interest
is to be used to mitigate the normal order for costs then that public interest
must go further than mere precedent
value.^[82]

• that there is no evidence that the applicant was discriminated against
  because of his
  disability;^[83]
  and
• whether legal proceedings are an appropriate medium for the purpose of
  examining the ambiguities in a policy - in Hurst and Devlin v Education
  Queensland (No
  2),^[84]
  Lander J accepted that ‘it would be in the interests of all parties if
  Education Queensland’s Total Communication Policy could be understood by
  all persons affected in the same
  way’^[85]
  but expressed the view that ‘legal proceedings are not the appropriate
  medium for the purpose of examining the ambiguities in an education
  policy.^[86]

In
Access For All Alliance (Hervey Bay) Inc v Hervey Bay City
Council,^[87]
the Federal Court considered whether to make a costs order against a disability
rights organisation that was held not to have standing to commence proceedings
alleging a breach of the Disability Standards for Accessible Public Transport
2002 (created under s 31 of the DDA). On the question of costs, the
applicant argued that the proceedings raised issues of public interest, noting
that the applicant had:

• sought to raise important issues relevant to the scope and operation of
  disability standards made under the DDA; and
• brought the proceedings to effect social change, rather than for personal or
  financial gain.

The Court rejected these arguments, for the
following
reasons:^[88]

• the weight of the case law was against the applicant having standing to be
  able to bring the proceedings;
• the question of standing of an organisation to bring proceedings in relation
  to a breach of disability standards is not of sufficient public interest to
  cause the Court to depart from its usual orders;
• given that the applicant lacked standing to commence the proceedings, the
  Court was never able to consider the merits of the case so the substantive
  issues that the applicant sought to raise were never resolved; and
• the case did not raise fundamental rights of individuals to take action on
  their own behalf to determine their rights.

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8.3.2 Unrepresented
applicants

Driver FM’s discussion of the public
interest element of Xiros v Fortis Life Assurance Ltd
(‘Xiros’),^[89]
was considered in 8.3.1 above. His
Honour also identified the following matter as being relevant to the exercise of
the discretion to award costs in that case:

Another circumstance that may warrant a departure from the general principle
is where the unsuccessful party is unrepresented and was not in a position to
make a proper assessment of the strength or weakness of his case, and, hence,
the risk associated with the litigation. Mr Xiros had the benefit of legal
assistance for his complaint to HREOC but he was unrepresented in these
proceedings. The issue to be resolved was a technical one: whether there was a
sufficient actuarial basis for the exclusion from benefits in the insurance
policy of HIV/AIDS derived conditions, an issue on which the respondent bore the
onus of proof. That issue could only be resolved by the pursuit of the present
application to this Court, and Mr Xiros was not in a position to make a reliable
assessment of his prospects of
success.^[90]

In Hassan v
Smith,^[91]
Raphael FM noted that the applicant was self-represented and that he had brought
the proceedings out of deeply held beliefs. His Honour also noted that ‘in
this jurisdiction of the Federal Magistrates Court discretion may be exercised
more leniently in favour of unsuccessful
applicants’.^[92]
However, Raphael FM ordered that the unsuccessful applicant pay the
respondent’s costs as his Honour was of the view that the applicant had
been aware of the problems that his case faced and had wished to continue the
matter so as ‘to have his day in
court’.^[93]

Similarly, in Gluyas v Commonwealth (No
2),^[94]
Phipps FM was not persuaded that the fact that the unsuccessful applicant was
unrepresented justified departing from the ordinary rule that costs follow the
event.

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8.3.3 The
successful party should not lose the benefit of their
victory

The relevance of this factor appears to have been
closely associated with the suggestion in earlier
cases^[95] that
the principle that costs follow the event should not be too readily applied to
federal unlawful discrimination matters. While that approach may have benefited
unsuccessful applicants, it stood to render futile the claims of applicants
whose awards of compensation might be ‘swallowed up’ by legal fees.
To ameliorate that potential problem, the Court indicated that it was
appropriate to have regard to that issue as a factor weighing in favour of
ordering costs to be paid to a successful applicant.

In Shiels v
James,^[96]
Raphael FM held that the amount of the award of damages to the applicant would
be totally extinguished if no order for costs was made and in those
circumstances costs should follow the event.

In Travers v New South
Wales,^[97]
Raphael FM stated:

This matter was originally commenced in the Federal Court. There was a
lengthy hearing of Notice of Motion before Justice Lehane and the case before me
lasted 2 ½ days. If costs were not awarded Stephanie would lose the benefit
of the entire judgment. I order that the respondent should pay the
applicant’s costs to be taxed on the Federal Court scale if not
agreed.^[98]

Similarly, in McKenzie v Department of Urban
Services,^[99]
Raphael FM ordered that the respondents pay the costs of the applicant,
stating:

Anti-Discrimination matters are generally considered to be a type of dispute
which do not attract orders for costs. There was no provision for costs in the
inquiry system previously operated by HREOC. In state tribunals there is
provision to award costs but this is not often done. The Federal Court and the
Federal Magistrates Court are courts of law and not tribunals and the HREOC
Act does not contain any prohibition on the award of costs. In previous
matters which have come before me e.g. Shiels and Travers I have
indicated that I think an award of costs is appropriate where otherwise a party
may have the benefit of his or her award of damages totally eliminated by the
cost of the
proceedings.^[100]

In Johanson v
Blackledge,^[101]
Driver FM ordered that costs should follow the event. His Honour agreed with the
views expressed by Raphael FM in Shiels v
James^[102]
concerning the general desirability of an award of costs in favour of a
successful applicant in human rights proceedings, so as to avoid an award of
damages being swallowed up by the cost of litigation.

His Honour made similar comments in Escobar v Rainbow Printing Pty Ltd
(No 3),^[103]
stating:

My general approach to the issue of costs in human rights proceedings where
an applicant is successful is set out in my decision in Cooke v Plauen
Holdings Pty Ltd [2001] FMCA 91. In that case I expressed agreement with
views expressed by Federal Magistrate Raphael in Shiels v James [2000]
FMCA 2, in particular at paragraph 80 of his decision. I noted the general
desirability of an award of costs in favour of a successful applicant in human
rights proceedings so as to avoid an award of damages being swallowed up by the
cost of
litigation.^[104]

With courts being apparently more inclined to award costs following the
event,^[105]
it may be that this factor becomes less relevant. Alternatively, it may have
some residual relevance as a factor in supporting the proposition that the FMC
should be reluctant to depart from the principle that costs follow the event in
such cases.

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8.3.4 Courts
should be slow to award costs at an early stage

In Low
v Australian Tax
Office^[106]
(‘Low’), Driver FM dismissed the application on the basis
that an extension of time for the filing of the application should not be
granted because the application did not disclose an arguable case. His Honour
declined to award costs, however, stating:

In my view the Court should be slow to award costs at an early stage of human
rights proceedings so that applicants have a reasonable opportunity to get their
case in order, to take advice and to assess their position. It would, in my
view, be undesirable for costs to be awarded commonly at an early stage, as that
would provide a deterrent to applicants taking action under what is remedial
legislation in a jurisdiction where costs have historically not been an
issue.

By disposing of the application now at this relatively early stage the
respondent is able to avoid being put to the substantial expense of a full
hearing and in those circumstances I do not think it necessary or appropriate to
make any order as to
costs.^[107]

In Saddi v Active
Employment,^[108]
Raphael FM cited with approval and applied the approach of Driver FM in
Low. Although Raphael FM declined to exercise his discretion to allow Mr
Saddi to continue with his proceedings out of time (as Raphael FM was not
satisfied that Mr Saddi’s application had any prospect of success), he
made no order for costs.

Driver FM has since reconsidered his decision in Low, suggesting that
it reflected the relative novelty of the legislation at that time (a factor
which no longer applies). In Drury v Andreco-Hurll Refractory Services Pty
Ltd,^[109]
his Honour awarded costs to the respondent following summary dismissal of the
complaint, stating:

In the matter of Low v Australian Taxation Office [2000] FMCA 6, I
declined to make a costs order noting that at that time I was dealing with
relatively new legislation and that I considered that applicants should have a
reasonable opportunity to take advice and assess their position before being
subjected to a costs order. Conversely, in Chung v University of Sydney I
did make a costs order in accordance with the scale of costs applicable
generally to proceedings in this Court. Some three years have passed since I
made the decisions in Low and Chung. We are no longer dealing with
new legislation.^[110]

Relevant to the matter before his Honour, the applicant was ‘attempting
to relitigate matters he was litigating in the [Australian Industrial Relations
Commission]’ and had been notified by the respondent of their intention to
seek summary dismissal and the possible costs
implications.^[111]

However, Driver FM reaffirmed that parties should be given ‘a
reasonable opportunity to take advice as to their circumstances and to get their
claim into a proper form’ in Hinchliffe v University of Sydney (No
2).^[112]
In that matter his Honour cited his decision in Low in declining to order
indemnity costs against an unsuccessful applicant who had withdrawn aspects of
her case throughout the course of
proceedings.^[113]

In Ingui v
Ostara,^[114]
where the applicant discontinued proceedings prior to the hearing, Brown FM held
that it was reasonable that the applicant should make some contribution to the
costs incurred by the respondents in the proceedings to
date.^[115]
He therefore ordered that each party have the opportunity to make submissions as
to the quantum of costs to be
allowed.^[116]

Subsequently in Ingui v Ostara (No
2),^[117]
the applicant argued that as a result of intimidation and harassment by the
respondents she did not pursue her claim of sexual harassment. Brown FM stated
that as there had been no substantive hearing, he was not in a position to
assess the bona fides of the respondents in respect of the position they took in
the litigation and could find no reason to change his view that the applicant
should contribute towards the respondents’ costs. He did, however, reduce
the amount of costs that would be awarded under the scale of costs.

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8.3.5 Unmeritorious
claims and conduct which unnecessarily prolongs
proceedings

Courts have declined to order costs to
successful parties, or reduced the amount of a costs award, where aspects of
their claims have been unsuccessful or where their behaviour has prolonged the
trial. On the issue of indemnity costs being awarded against unsuccessful
parties, see 8.4 below.

In Xiros v Fortis Life Assurance
Ltd,^[118]
Driver FM made the following observation in the course of considering the issue
of costs after dismissing the application:

One circumstance that might disentitle a successful litigant to an order for
costs can be the behaviour of the litigant during the course of the proceedings,
for example, by taking unnecessary technical points or otherwise inappropriately
prolonging the proceedings. That is certainly not the case here. On the
contrary, the respondent, through its legal representatives, has behaved
impeccably.^[119]

His Honour nevertheless declined to award costs to the respondent for other
reasons.^[120]

In Horman v Distribution Group
Ltd,^[121]
Raphael FM held that the fact that the trial was prolonged by the conduct of the
applicant and her untruthfulness and that her Counsel persisted in suggesting a
conspiracy between the respondent’s witnesses militated against a costs
order despite the fact that the applicant had been successful in the
proceedings. His Honour therefore ordered that each party pay their own costs.
On appeal, Raphael FM’s approach to costs was affirmed by Emmett
J.^[122]

In Bruch v
Commonwealth^[123]
McInnis FM stated that in the exercise of his discretion on the issue of costs,
it was relevant to take into account the fact that the applicant had made an
extravagant claim for damages ‘solely to demonstrate
anger’.^[124]
His Honour was of the view that this was not a valid basis for claiming damages
or for exaggerating a claim in a human rights application. However, by reason of
the fact that the respondent’s application for summary dismissal was
dismissed, McInnis FM determined that it was appropriate to order that the
applicant pay only eighty per cent of the respondent’s costs.

In Creek v Cairns Post Pty
Ltd,^[125]
Kiefel J took into account the fact that the proceedings were lengthened by the
respondent in raising a defence which was found not to be available to it:

The only matter which seems to me to weigh against the applicant being
ordered to pay the respondent’s costs in the proceedings is the time taken
in the hearing on the defence raised by the respondent, which I found would not
have been available to it. Indeed it was upon the basis that the provisions of s
18D had not been judicially considered, that the matter remained in this Court
when it would otherwise have been transferred to the Magistrates’ Court
with consequent savings on costs. Taking these matters into account I consider
it appropriate to order that the applicant pay one-half of the costs incurred by
the respondent in the proceedings, including reserved
costs.^[126]

In Tate v
Rafin,^[127]
Wilcox J found the behaviour of the respondent prior to the commencement of
proceedings was relevant in declining to order costs upon the dismissal of the
application. His Honour stated:

Generally speaking, it may be expected an order will be made in favour of the
successful party. However, in the present case, I do not think it appropriate to
make an order for costs. Although I have determined the proceeding must be
dismissed, the respondents bear substantial responsibility for the fact that it
was commenced in the first place; generally, because of the way they handled the
situation that arose at the training session and, more particularly, because of
the misleading impression conveyed by the fifth paragraph of the letter of 20
February 1996 [which suggested that the decision to revoke the applicant’s
membership was by reason of his
disability].^[128]

However, in Ho v Regulator Australia Pty Ltd (No
2),^[129]
Driver FM rejected an argument by the applicant that the conduct of the
respondent during the investigation and attempted conciliation of the matter by
HREOC was relevant to the question of costs:

I do not regard the conduct of the parties to a complaint to HREOC as
relevant to a consideration of a costs order in proceedings before the Court
consequent upon the termination of a complaint by HREOC. In the first place, the
proceedings before HREOC are in the nature of private alternative dispute
resolution proceedings. The Court only has jurisdiction to deal with a matter
where conciliation fails before HREOC. It is entirely inappropriate for the
Court to take into account what may or may not have occurred in the attempts at
conciliation before HREOC for the purposes of costs in the court proceedings. No
costs apply to conciliation proceedings before HREOC and there should be no
costs implication arising subsequently in respect of those conciliation
proceedings.^[130]

Although
the grounds of direct and indirect discrimination have been held to be mutually
exclusive,^[131]
an incident of alleged discrimination may nonetheless be pursued by an applicant
as a claim of direct or indirect discrimination, pleaded as
alternatives.^[132]
It has been suggested, however, that doing so may give rise to an adverse costs
order as only one element of the claim can succeed. In Hollingdale v Northern
Rivers Area Health
Service,^[133]
Driver FM commented as follows:

There is, in my view, no obligation upon an applicant to make an election
between mutually exclusive direct and indirect disability claims. If both claims
are arguably open upon the facts, they may be pleaded in the alternative. The
fact that they are mutually exclusive would almost inevitably lead to a
disadvantageous costs outcome for an applicant, but that is the
applicant’s choice.^[134]

In Access For All Alliance (Hervey Bay) Inc v Hervey Bay City
Council,^[135]
the unsuccessful party in that case had also alleged that the Council had
unreasonably prolonged the proceedings. This argument was primarily based on the
fact that the Council’s application for summary dismissal had also sought
to raise constitutional questions, however those questions could not be heard
because of the Council’s failure to comply with the requirements of s 78B
of the Judiciary Act 1903 (Cth). The Court did not accept that this was a
sufficient basis to warrant departure from the usual rules as to
costs.^[136]

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8.3.6 Applicant
only partially successful

In cases in which an applicant
has only been partially successful courts have taken varying approaches to the
award of costs. In some cases they have ordered the respondent to pay all of the
applicant’s
costs^[137]
and in other cases they have only awarded the applicant a proportion of their
costs.^[138]

There is no set rule for determining in what circumstances a partially
successful applicant will be awarded part or all of their costs. However, what
the cases do suggest is that whilst the court should consider the outcome in the
proceedings, it should not attempt to engage in a precise mathematical
determination of the extent to which an applicant was
successful.^[139]

In McBride v State of Victoria (No
2),^[140]
the applicant had been successful in only one of seven separate and discrete
episodes of discrimination. McInnis FM rejected the respondent’s
submission that the applicant should only be entitled to one-seventh of her
costs saying:

I do not accept that in characterising what may be the event, one should look
narrowly at the issue in human rights claims of there being discrete episodes in
the one proceeding.

...Although analysed and presented as discrete events [of discrimination],
there is an element of continuity, at least in the perception of the applicant,
and it is somewhat artificial, in my view, to divide the issues exactly in the
way proposed by the respondent, that is, to apportion costs on a six-seventh or
one-seventh
basis.^[141]

In Access For All Alliance (Hervey Bay) Inc v Hervey Bay City
Council,^[142]
the Federal Court held that a party should not be regarded as having succeeded
in relation to only part of its claim simply because some of its arguments had
not been accepted:

While clearly some arguments put before the Court by the respondent in its
application for summary dismissal were not accepted, nonetheless it is not
unusual for a successful party to advance a number of alternative arguments to
the Court and be ultimately successful on only some of them. I agree with the
respondent that this result does not mean that the respondent was
‘successful only in part’ in this
case.^[143]

In cases in which courts have awarded full costs to a partially successful
applicant the court appears to have been influenced by the following
factors:

• the general desirability in human rights proceedings that an award of
  damages not be swallowed up by the costs of
  litigation;^[144]
• that the court accepted the veracity of the applicant’s
  evidence;^[145]
• if costs were awarded the applicant would achieve a better outcome than what
  the respondent had offered, although not as good as the amount the applicant had
  sought;^[146]
• the applicant’s claim in respect of which they were unsuccessful was
  reasonably
  arguable;^[147]
  and
• that an applicant has incurred significant costs in dealing with a very
  detailed and complex response made by the respondent and is ‘largely
  successful on the
  law’.^[148]

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8.4 Applications
for Indemnity Costs

8.4.1 General
principles on indemnity costs

Indemnity costs have been
sought in a number of cases litigated in the federal unlawful discrimination
jurisdiction. By way of example, in Hughes v Car Buyers Pty
Ltd,^[149]
the respondents ignored the HREOC conciliation process and did not enter
appearances in the proceedings in the FMC. Walters FM awarded the applicant
$5,000 aggravated damages for the additional mental distress caused by the
respondents’ conduct. The applicant also sought costs on an indemnity
basis on the basis of the respondents’ behaviour. Walters FM
noted^[150]
the following examples set out by Sheppard J in Colgate-Palmolive v
Cussons^[151]
in which a court may make an indemnity costs order (the list not being
exclusive):

• the making of allegations of fraud knowing them to be false and the making
  of irrelevant allegations of fraud;
• misconduct that causes loss of time to the court and to other parties;
• the fact that the proceedings were commenced or continued for some ulterior
  motive or in wilful disregard of known facts or clearly established law;
• the making of allegations which ought never to have been made or the undue
  prolongation of a case by groundless contentions;
• an imprudent refusal of an offer to compromise; and
• where one party has been in contempt of court.

In the
circumstances, Walters FM declined to order indemnity costs, stating:

In my opinion, to award costs on an indemnity basis in the present
circumstances would be to inappropriately punish the respondents. It seems to me
that the attitude that they adopted to the HREOC complaint is irrelevant insofar
as costs in this court are concerned — although I recognise that the
application in this court may not have had to be filed at all if the respondents
had responded to the HREOC complaint. Whilst the respondents' refusal to
participate in the proceedings in this Court has obviously upset and frustrated
Ms Hughes, the fact of the matter is that the respondents have not sought to
justify their actions or made inappropriate or unfounded allegations against Ms
Hughes. They did not prolong the proceedings by making groundless contentions or
filing unmeritorious applications. They simply let the proceedings run their
course.^[152]

In Hassan v
Smith,^[153]
Raphael FM held that the applicant should pay party-party costs because although
he was told by HREOC upon termination of his complaint of the difficulties he
faced in establishing his claim, and by Raphael FM at two directions hearings,
he nevertheless ‘wanted his day in
court’.^[154]
However, Raphael FM held that the applicant’s conduct was not so
unreasonable so as to warrant indemnity costs being awarded.

An application for indemnity costs was also refused in Kowalski v Domestic
Violence Crisis Service Inc (No
2),^[155]
where Driver FM noted that the fact the applicant ‘was wholly unsuccessful
does not mean that the proceedings should not have been instituted or
continued’.^[156]

In contrast, indemnity costs were awarded against the unsuccessful applicant
by Driver FM in Wong v
Su,^[157]
where his Honour noted:

The applicant has been wholly unsuccessful in these proceedings. The
application was pursued in a desultory way by the applicant and in the knowledge
that the allegations made by her were untruthful. Accordingly, the application
must be dismissed with costs. In addition, it is appropriate in the
circumstances that the Court express its strong disapproval, both of the fact
that the application was made at all and also the manner in which it was
pursued. Applications of this nature, based upon untruthful evidence, are apt to
bring anti-discrimination legislation into disrepute, and do a grave disservice
to others wishing to pursue a genuine grievance. The respondents should not be
out of pocket in having dealt with this
application.^[158]

In Hinchliffe v University of Sydney (No
2),^[159] Driver FM considered
an application by the successful respondent for indemnity costs in relation to:

• costs of and incidental to the proceedings from the time at which an offer
  of compromise lapsed;
• costs thrown away by the respondent occasioned by the applicant’s late
  withdrawal of a significant part of her claim; and
• costs of complying with an onerous request for documents.

Driver
FM rejected the application for indemnity costs and awarded costs on a
party-party basis. On the first issue, his Honour noted that an offer of
compromise had been made in relation to an issue that was severed from the
claim, and never litigated to judgment. No offer was made in relation to the
matters that were litigated to judgment.

On the second point, Driver FM stated:

as I pointed out at an early stage in the life of the human rights
jurisdiction of this Court (Low v Australian Taxation Office [200] FMCA
6) applicants should be given a reasonable opportunity to take advice as to
their circumstances and to get their claim into a proper form. The respondent
adopted a legalistic approach to the conduct of the litigation. To some extent,
that was a legitimate attempt to clearly identify what the applicant was
claiming. However, as I pointed out in my principal judgment, the respondent was
unduly legalistic in relation to the issue of pleadings. It certainly took a
considerable period for the applicant, through her legal advisers, to finally
settle upon the way in which her claim would be pursued. However, the factual
and legal issues were by no means simple, as is reflected in the length of the
written submissions received in the principal proceedings and the length of my
judgment. There was nothing improper in the conduct of the applicant or her
legal advisers and she was not so tardy in the refinement of her claim as to
expose herself to an indemnity costs
order.^[160]

As to the costs sought in relation to the request for documents, his Honour
noted that if the respondent considered the request to be oppressive, ‘it
could have sought interlocutory relief from the
Court’.^[161]
Driver FM noted that the FMC Rules make specific provision for photocopying and
that disbursements should be agreed between the parties under that
scale.^[162]

In Piper v Choice Property Group Pty
Ltd,^[163]
McInnis FM summarily dismissed an unlawful discrimination application and
awarded the respondent indemnity costs at a fixed sum of $3,500. His Honour did
so because it was clear to him, although he accepted it may not have been as
clear to the applicant, that at all material times the respondent could not have
been the appropriate party for the applicant to
pursue.^[164]

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8.4.2 Offers
of compromise

Litigants in unlawful discrimination
matters should be aware that O 23 of the Federal Court Rules in relation
to offers of compromise apply to proceedings before both the Federal Court and
FMC.^[165]
While readers should consult the Federal Court Rules directly, one significant
aspect of O 23 is that:

where an offer is made by the first party in accordance with the Federal
Court Rules; and

that offer is not accepted by the second party; and

that second party is less successful in the proceedings than had they
accepted the offer; then

unless the Court otherwise
orders,^[166]
the first party is entitled to indemnity costs from the day upon which
the offer was
made.^[167]

This exposure to indemnity costs following the rejection of an offer was only
previously faced by a respondent. Since 23 March 2004 it is also faced by an
applicant.^[168]

Order 23 only applies, however, in situations where an applicant obtains some
form of relief and does not apply in circumstances where an applicant fails
altogether to obtain
relief.^[169]

Further, if there is more than one respondent and an applicant makes an offer
of compromise that requires all of the respondents to accept it, then this is
not considered to be an offer under O 23 and a failure to accept it does not
enliven the
rule.^[170]

Offers of compromise made by parties in litigation which do not fall within
the terms of O 23 (also known as
‘Calderbank’^[171]
offers) may nevertheless be taken into account in the exercise of a
court’s general discretion in awarding costs. In Henderson v Amadio Pty
Ltd^[172]
Heerey J stated:

Counsel for the respondents argued that O 23 now constitutes a code and
excludes any reliance on Calderbank letters. I do not agree. The Calderbank
letter is such a useful and flexible weapon for litigants who want to achieve a
reasonable settlement that in the absence of express provisions to that effect I
am not prepared to draw the inference that the rule-makers intended to exclude
it. In any case, I do think that O 23 was apt to cover an offer addressed to a
number of respondents but conditional upon acceptance by
all...^[173]

Justice Hely in Port Kembla Coal Terminal Ltd v Braverus Maritime Inc
(No 2)^[174]
noted a significant distinction between an offer of compromise falling
within O 23 of the Federal Court Rules and a Calderbank offer:

In the case of a Calderbank offer, the issue is whether the conduct of the
defendant in failing to accept the offer was unreasonable in all of the
circumstances, so as to justify a departure from the usual rule as to costs.
However,...in the case of an offer of compromise, the mere fact the
defendant’s case was ‘bona fide and arguable’, to adopt the
language used in the defendant’s submissions, is not of itself sufficient
to displace the operation of the Rule [Order
23].^[175]

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(a) Calderbank
offers in unlawful discrimination cases

A number of
unlawful discrimination cases have considered the principles applicable to
Calderbank offers. In Forbes v
Commonwealth^[176]
Driver FM cited Calderbank as authority for the proposition that
indemnity costs are available where offers of settlement have been made at an
earlier stage of proceedings and the unsuccessful party has failed to achieve a
better result than that expressed in the offer. His Honour stated that he would
apply the principle to a successful party who does no better than an
offer made to him/her prior to a
hearing.^[177]

In Rispoli v Merck Sharpe & Dohme (No
2),^[178]
Driver FM said that:

There is a public policy underlying the consideration of offers, especially
Calderbank offers, by the courts. That public policy is that parties should be
encouraged to realistically consider their claims prior to incurring substantial
expense in litigation and attempt to settle proceedings on a realistic basis.
Bearing that public policy in mind, where a party does not do as well as an
offer made to the party during the course of the litigation, it is common for
courts either to deny that party costs or even to make a costs order against the
party.

In that matter, Driver FM did not grant an indemnity costs order against the
unsuccessful applicant holding that ‘the decision of the applicant to
pursue her claim through to a final hearing was neither improper or
unrealistic’.^[179]

In Jacomb v Australian Municipal Administrative Clerical & Services
Union,^[180]
Crennan J considered an offer from the respondent in the following terms, which
was expressed to be in accordance with the principles in Calderbank:

1. That the Applicant discontinue the application by 9.30am on Monday
11 August 2003 with no order as to costs.

2. Each party bear its own legal costs associated with these
proceedings.^[181]

Her Honour stated as follows:

The principles governing Calderbank offers have been the subject of a number
of decisions of this Court: see for example Black v Tomislav Lipovac BHNF
Maria Lipovac & Ors [1998] FCA 699; Dr Martens Australia Pty Ltd v
Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 (‘Dr Martens’).
As a general rule, the mere refusal of the Calderbank offer does not
automatically mean that the Court should make an order for costs on an indemnity
basis, even where the result, following refusal of the offer, is less favourable
to the offeree than that contained in the offer. Rather, the offer to settle
must be a genuine offer to compromise, and there must be some element of
unreasonableness in the offeree’s refusal to accept the offer: see Fresh Express Australia Pty Ltd v Larridren Pty Ltd [2002] FCA 1640;
Dr Martens.

It is doubtful that the abovementioned offer amounted to a genuine offer of
compromise, consistent with the principles in Calderbank, as the offer appeared
to be merely an invitation to discontinue the proceedings, a circumstance which
a number of courts have found to be insufficient for the purposes of applying
the principles applicable to Calderbank offers: Australian Competition and
Consumer Commission v Universal Music Australia Pty Ltd (No. 2) [2002] FCA
192; Vasram v AMP Life Ltd [2002] FCA 1286; [Fyna Foods Australia Pty
Ltd v Cobannah Holdings Pty Ltd (No 2) [2004] FCA 1212]. Even if the
offer were in the nature of a genuine Calderbank offer, that is but one factor
to be taken into account in the Court’s exercise of discretion: Fyna
Foods at [10].
^[182]

Her Honour concluded, also taking into account the element of public interest
in the proceedings (see 8.3.1 above):

Bearing in mind all the circumstances of this case, and accepting that I have
an overall discretion in the matter, this is not an appropriate case to award
indemnity costs. In all the circumstances, the applicant was not acting
unreasonably, in refusing the offer to compromise, when the question of
statutory construction had not been determined by the Federal Court on any prior
occasion. Bearing in mind that the proceeding had consequences going beyond the
individual applicant, and bearing in mind the various other considerations urged
by the applicant and the respondent in their written submissions, I propose to
order that the applicant pay seventy-five per centum (75%) of the
respondent’s
costs.^[183]

In Meka v Shell Company of Australia Ltd (No
2),^[184]
Driver FM found that the form of offer made did not strictly comply with O 23
but that the respondents should receive indemnity costs on the basis of the
principles in Calderbank. Indemnity costs were awarded from the day after
the offer was rejected. While this date was a period of time later than the
offer was to have expired, the Court held, in effect, that the respondent had
kept the offer open by calling the applicant’s solicitor to discuss
it.^[185]

In San v Dirluck Pty Ltd (No
2),^[186]
the respondent had made a number of offers to settle the matter, none of which
were accepted. The last such offer was made on the first day of the hearing of
the matter, expressed as follows:

1. The first respondent and second respondent to pay the applicant the total
combined sum of $5,000 by way of damages.

...

3. The complaint to be withdrawn with no order as to costs.

The applicant was successful in the
proceedings^[187]
and was awarded $2,000 in damages. The respondent sought indemnity costs on the
basis of the rejection of the final offer made. Raphael FM noted that the
respondent’s last offer was ‘obviously less than the $5,000
offered...but it is quite clearly not less than the amount of $2,000 plus the
applicant’s reasonable costs calculated under schedule 1 of the Federal
Magistrates Court Rules’ and concluded that as the offers made did not
therefore exceed the value of the judgment the respondent was not entitled to
its costs at
all.^[188]

In Iliff v Sterling Commerce (Australia) Pty Ltd (No
2),^[189]
Burchardt FM considered whether the rejection by the applicant of a
Calderbank offer and an offer of compromise warranted ordering her to pay the
respondent’s costs. Burchardt FM held that neither the Calderbank offer
nor the offer of compromise warranted such an order
because:^[190]

• the Calderbank offer was served a week before Christmas and sought a
  response within two days, which was not, in his Honour’s view,
  reasonable;
• the applicant had sought and been granted declaratory relief in addition to
  the order for payment of damages and neither the Calderbank offer nor the offer
  of compromise had addressed the issue of such relief; and
• neither the Calderbank offer nor the offer of compromise made any offer in
  relation to payment of the applicant’s costs.

top | contents

8.5 Application
of s 47 of the Legal Aid Commission
Act 1979 (NSW) to Human Rights Cases in the FMC

It
would appear that legally aided applicants before the FMC are not
protected by s 47 of the Legal Aid Commission Act 1979 (NSW) against
liability for the payment of the whole or part of the costs that might be
ordered by the court if unsuccessful in human rights proceedings.

Section 47 of the Legal Aid Commission Act 1979 (NSW) provides
that:

47 Payment of costs awarded against legally assisted persons

(1) Where a court or tribunal makes an order as to costs against a legally
assisted person:

(a) except as provided by subsections (2), (3), (3A), (4) and (4A), the
Commission shall pay the whole of those costs, and

(b) except as provided by subsections (3), (3A), (4) and (4A), the legally
assisted person shall not be liable for the payment of the whole or any part of
those costs

(2) The Commission shall not pay an amount in excess of $5,000 (or such
other amount as the Commission may from time to time determine):

(a) except as provided by paragraph (b), in respect of any one proceeding,
or

(b) in respect of each party in any one proceeding, being a party who has,
in the opinion of the Commission, a separate interest in the proceeding.

In Minns v New South Wales (No
2),^[191]
Raphael FM found that s 47 does not apply to proceedings in the FMC. In
reaching this view, Raphael FM applied the decision of the High Court in Bass
v Permanent Trustee Co
Ltd.^[192]
The issue is yet to be determined by the Federal Court, but it would appear
likely that it would be decided in a similar manner.

top | contents

---

^[1]
See s 43 of the Federal Court Act and s 79 of the Federal Magistrates
Act.
^[2]
See Hughes v Western Australian Cricket Association (Inc) (1986) ATPR
40-748, 48-136. As will be discussed below, there was initially some doubt as to
whether the principle that costs follow the event applied to federal unlawful
discrimination matters. However, it now appears clear that this principle does
apply.
^[3]
Forster v Farquhar (1893) 1 QB 564 (cited with approval in Hughes v
Western Australian Cricket Association (Inc) (1986) ATPR 40-748, 48-136). In
those circumstances, it may be reasonable for the successful party to bear the
expense of litigating that portion upon which they have failed. See further 8.3.5
below.
^[4]
Cretazzo v Lombardi (1975) 13 SASR 4 (cited with approval in Hughes v
Western Australian Cricket Association (Inc) (1986) ATPR 40-748, 48-136).
See also Cummings v Lewis (1993) 41 FCR 559,
602-604. In those
circumstances, the successful party may not only be deprived of the costs of
litigating those issues but may also be required to pay the other party’s
costs.
^[5]
Ritter v Godfrey (1920) 2 KB 47 (cited with approval in Hughes v Western
Australian Cricket Association (Inc) (1986) ATPR 40-748, 48-136). See
also Jamal v Secretary Department of Health (1988) 13 NSWLR 252,
271.
^[6]
In Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 the majority of the Full
Federal Court (Black CJ and French J) considered it appropriate to make no
orders for costs against the two unsuccessful respondents. Their Honours had
particular regard to the fact that the proceedings raised novel and important
questions of law concerning alleged deprivations of liberty, the executive power
of the Commonwealth, the operation of the Migration Act 1958 (Cth) and
Australia’s obligations under international law. Other relevant factors
listed included that there was no potential for the unsuccessful parties to make
financial gain from bringing their actions and that their legal representation
was provided on a pro-bono
basis.
^[7]
‘Party-party’ costs are those reasonable costs incurred in the
conduct of litigation. The court may make this order at a directions hearing: O
62A, r 1 Federal Court
Rules.
^[8]
Order 62A r 4 Federal Court
Rules.
^[9]
Rule
21.03(3).
^[10]
Maunchest Pty Ltd v Bickford (Unreported, Queensland Supreme Court,
Drummond J, 7 July 1993); Roger Muller v HREOC [1997] FCA 634; Hanisch
v Strive Pty Limited (1997) 74 FCR 384, 389-390; Sacks v Permanent
Trustee Australia Ltd
(1993) 45 FCR 509, 513.

^[11]
Corcoran v Virgin Blue Airlines Pty Ltd [2008] FCA 864,
[58]-[61].
^[12]
This concern was expressed in a letter dated 6 November 1991 from the then Chief
Justice of the Federal Court to the then President of the Law Council of
Australia, quoted by Beazley J in Sacks v Permanent Trustee Australia Ltd
(1993) 45 FCR 509,
511.
^[13]
[2006] FMCA
1818.
^[14]
[2006] FMCA 1818,
[43].
^[15]
(1997) 74 FCR 384.

^[16]
[2008] FCA
864.
^[17]
[2008] FCA 864, [8],
[56].
^[18]
[2008] FCA 864, [6],
[15]-[41].
^[19]
[2008] FCA 864,
[39]-[41].
^[20]
[2008] FCA 864,
[41].
^[21]
[2008] FCA 864,
[45].
^[22]
[2008] FCA 864,
[54].
^[23]
The orders were made on 1 July 2008. A copy of the orders can be accessed by
using the e-search available on the Federal Court website. The proceedings in
respect of Mr Corcoran are no. NSD 1890/2007 and the proceedings re Mr Ferguson
are no NSD 1890/2007.

^[24]
Flew v Mirvac Parking Pty Ltd [2006] FMCA 1818; Vickers v The
Ambulance Service of NSW [2006] FMCA
1232.
^[25]
Sacks v Permanent Trustee Australia
Ltd(1993) 45 FCR
509; Dibb v Avco Financial Services Ltd [2000] FCA 1785; Woodlands v
Permanent Trustee Co Ltd (1995) 58 FCR 138. Also see Joanna Shulam,
‘Order 62A of the Federal Court Rules – An untapped resource for
unlawful discrimination cases’ (2007) 32 Alternative Law Journal
75.
^[26]
Flew v Mirvac Parking Pty Ltd [2006] FMCA 1818,
[41]-[44].
^[27]
See FMC Rules, r 21.02(c): the Court may refer costs for taxation under O 62 of
the Federal Court Rules
(Cth).
^[28]
[2002] FMCA 160. See also Barghouthi v Transfield Services [2001] FMCA
113; Chung v University of Sydney [2001] FMCA 94; Miller v Wertheim
[2001] FMCA
103.
^[29]
[2002] FMCA 160,
[7]-[9].
^[30]
See Chapter 7: Damages and
Remedies.
^[31]
Australasian Performing Right Association Ltd v Pashalidis
[2000] FCA 1815,
[13].
^[32]
(1994) 53 FCR
10.
^[33]
(1994) 53 FCR 10, 12. See also Axe Australasia Pty Ltd v Australume Pty Ltd
(No 2) [2006] FCA 844,
[6].
^[34]Australasian
Performing Right Association Ltd v Metro on George Pty Ltd [2004]
FCA 1371, [8]-[12]; El Greco (Australia) Pty Ltd v Mediterranean Shipping Co
SA [2003] FCA 747; Tu v Pakway Australia Pty Ltd (2006) 227 ALR 287,
293
[32].
^[35]
(1994) 53 FCR 10,
12.
^[36]
(1994) 53 FCR 10, 12. Cf Universal Music Australia Pty Ltd v Miyamoto
[2004] FCA
982.
^[37]
FMC Rules, r
21.11(2)(b).
^[38]
[2004] FMCA
640.
^[39]
[2004] FMCA 640,
[10]–[12].
^[40]
[2003] FMCA
531.
^[41]
Tadawan v South Australia [2001] FMCA 25, [62], [63]; McKenzie v
Department of Urban Services (2001) 163 FLR 133, 156 [95]; Ryan v The
Presbytery of Wide Bay Sunshine Coast [2001] FMCA 12, [20]; Xiros v
Fortis Life Assurance Ltd (2001) 162 FLR 433, 440-441 [20]; Paramasivam v
Wheeler [2000] FCA 1559, [9]-[10]; Hagan v Trustees of the Toowoomba
Sports Ground Trust (2000) 105 FCR 56, 61 [31].

^[42]
[2002] FMCA
197.
^[43]
[2001] FMCA 25, [62],
[63].
^[44]
[2002] FMCA 197,
[13].
^[45]
The unlawful discrimination matters were: Physical Disability Council of NSW
v Sydney City Council [1999] FCA 815; Sluggett v Human Rights & Equal
Opportunity Commission [2002] FCA 1060 (but note that both matters were
decided prior to the transfer of the hearing of matters in the unlawful
discrimination jurisdiction to the FMC and Federal Court from HREOC). The
‘public interest’ matters to which his Honour referred were: De
Silva v Ruddock (in his capacity as Minister for Immigration & Multicultural
Affairs) [1998] FCA 311; Ruddock v Vadarlis (No 2) (2001) 115 FCR
229; Oshlack v Richmond River Council (1998) 193 CLR 72.

^[46]
See, for example, Tate v Rafin [2000] FCA 1582, [71]; Creek v Cairns
Post Pty Ltd [2001] FCA 1150, [1]; Li v Minister for Immigration &
Multicultural Affairs [2001] FCA 1414, [57]; Paramasivam v Wheeler
[2001] FCA 231, [24] (Hill, Tamberlin and Carr JJ); Jacomb v Australian
Municipal Administrative Clerical & Services Union [2004] FCA 1600,
[4]; Rispoli v Merck Sharpe & Dohme (Australia) Pty Ltd (No 2)
[2003] FMCA 516, [11]; Ball v Morgan [2001] FMCA 127, [93]; Gluyas v
Commonwealth (No 2) [2004] FMCA 359, [5]; Hollingdale v North Coast Area
Health Service (No 2) [2006] FMCA 585, [10]. See, however, Ryan v Albutt
(No 2) [2005] FMCA 95 in which Rimmer FM cited Tadawan v South
Australia [2001] FMCA 25 in support of the view that costs do not follow the
event in unlawful discrimination matters: [7]. Her Honour’s decision would
appear to be contrary to the weight of recent authority, to which no reference
is made in the
decision.
^[47]
[2004] FCA
594.
^[48]
[2004] FCA 594,
[8].
^[49]
[2004] FCA 594,
[9].
^[50]
Wiggins v Department of Defence - Navy (No 3) [2006] FMCA 970,
[35].
^[51]
Thompson v IGT (Australia) Pty Ltd [2008] FCA 994,
[63].
^[52]
Thompson v IGT (Australia) Pty Ltd [2008] FCA 994,
[63].
^[53]
Thompson v IGT (Australia) Pty Ltd [2008] FCA 994,
[64]-[65].
^[54]
See, for example, Wattle v Kirkland [2001] FMCA
66.
^[55]
Xiros v Fortis Life Assurance Ltd (2001) 162 FLR 433, 44 [24], [25];
Dranichnikov v Minister for Immigration and Multicultural Affairs [2002]
FMCA 71, [5]; Chau v Oreanda Pty Ltd [2001] FMCA 114; Gibbs v
Wanganeen (2001) 162 FLR 333; Murphy v Loper [2002] FMCA 310. In
Rispoli v Merck Sharpe & Dohme (Australia) Pty Ltd (No 2) [2003] FMCA
516, Driver FM noted that there were, in that matter, no issues of public
interest that would indicate a departure from the general principle that costs
follow the event, nor had the conduct of the applicant disentitled her to an
order for costs:
[4].
^[56]
Ruddock v Vadarlis (2001) 115 FCR 229, [18], [23]; cited with approval in
Jacomb v Australian Municipal Administrative Clerical & Services
Union [2004] FCA 1600,
[8].
^[57]
(2001) 115 FCR
229.
^[58]
(1998) 193 CLR
72.
^[59]
(1998) 193 CLR 72,
84.
^[60]
(2001) 115 FCR 229, 238
[18].
^[61]
[2007] FCA 974,
[27].
^[62]
(2001) 162 FLR
433.
^[63]
(2001) 162 FLR 433, 441 [24], [25]. See similar views expressed in
Dranichnikov v Minister for Immigration & Multicultural Affairs[2002] FMCA 71, [5]; Chau v Oreanda Pty Ltd [2001] FMCA 114; Gibbs
v Wanganeen (2001) 162 FLR 333; Murphy v Loper [2002] FMCA 310. In
Rispoli v Merck Sharpe & Dohme (Australia) Pty Ltd (No 2) [2003] FMCA
516, [4], Driver FM noted that there were, in that matter, no issues of public
interest that would indicate a departure from the general principle that costs
follow the event, nor had the conduct of the applicant disentitled her to an
order for
costs.
^[64]
(2001) 115 FCR
306.
^[65]
(2001) 115 FCR 306, 326
[97].
^[66]
[2004] FCA
1600.
^[67]
[2004] FCA 1600, [12]. See further 8.4.2
below.
^[68]
[2004] FCA 1600,
[10].
^[69]
[2005] FMCA
1624.
^[70]
See AB v New South Wales (2005) 194 FLR
156.
^[71]
[2005] FMCA 1624,
[5]-[7].
^[72]
[2002] FMCA
197.
^[73]
[2006] FMCA
970.
^[74]
[2006] FMCA 970, [42]. Applying Physical Disability Council of NSW v Sydney
City Council [1999] FCA 815, [9]; Jacomb v Australian Municipal
Administrative Clerical & Services Union [2004] FCA 1600,
[10].
^[75]
[2006] FMCA 970,
[39].
^[76]
[2006] FMCA 970,
[40].
^[77]
[2006] FMCA 970,
[41].
^[78]
[2006] FMCA 970,
[42].
^[79]
[1999] FCA 815, [9]; Access For All Alliance (Hervey Bay) Inc v Hervey Bay
City Council [2007] FCA 974,
[28].
^[80]
[2002] FMCA
197.
^[81]
[2002] FMCA 197, [13]. See also De Silva v Ruddock (in his capacity as
Minister for Immigration & Multicultural Affairs) [1998] FCA 311;
Physical Disability Council of NSW v Sydney City Council [1998] 311 FCA;
Sluggett v Human Rights & Equal Opportunity Commission [2002] 123 FCR
561; Howe v Qantas Airways Ltd (No 2) [2004] FMCA 934,
[15].
^[82]
[2002] FMCA 197, [13]. Note, however, that his Honour did not expressly refer to
Driver FM’s decision in
Xiros.
^[83]
Gluyas v Commonwealth (No 2) [2004] FMCA 359,
[8].
^[84]
[2005] FCA 793,
[33].
^[85]
[2005] FCA 793,
[33].
^[86]
[2005] FCA 793, [33]. Note that the decision of Lander J was overturned on
appeal and the consequent costs order set aside: Hurst v Queensland
(2006) 151 FCR 562, 585
[136].
^[87]
[2007] FCA
974.
^[88]
[2007] FCA 974,
[26]-[33].
^[89]
(2001) 162 FLR
433.
^[90]
(2001) 162 FLR 433, 441
[23].
^[91]
[2001] FMCA
58.
^[92]
[2001] FMCA 58, [25]. Note, however, that his Honour cited Tadawan v South
Australia [2001] FMCA 25 in support of that proposition. See the discussion
in 8.2
above.
^[93]
[2001] FMCA 58,
[27].
^[94]
[2004] FMCA
359.
^[95]
See Tadawan v South Australia [2001] FMCA 25, [62], [63]; McKenzie v
Department of Urban Services (2001) 163 FLR 133, 156 [95]; Ryan v The
Presbytery of Wide Bay Sunshine Coast [2001] FMCA 12, [20]; Xiros v
Fortis Life Assurance Ltd (2001) 162 FLR 433, 440-441 [20]; Paramasivam v
Wheeler [2000] FCA 1559, [9]-[10]; Hagan v Trustees of the Toowoomba
Sports Ground Trust (2000) 105 FCR 56, 61
[31].
^[96]
[2000] FMCA 2. In Frith v The Exchange Hotel (No 2) [2005] FMCA 1284, [6]
Rimmer FM expressed agreement with the approach taken by Raphael FM in
Shiels.
^[97]
(2001) 163 FLR
99.
^[98]
(2001) 163 FLR 99, 117
[74].
^[99]
(2001) 163 FLR
133.
^[100]
(2001) 163 FLR 133, 156
[95].
^[101]
(2001) 163 FLR
58.
^[102]
[2000] FMCA
2.
^[103]
[2002] FMCA
160.
^[104]
[2002] FMCA 160,
[5].
^[105]
See discussion in 8.2
above.
^[106]
[2000] FMCA
6.
^[107]
[2000] FMCA 6, [11]. His Honour made similar obiter comments in Chau v
Oreanda Pty Ltd [2001] FMCA 114,
[26].
^[108]
[2001] FMCA
73.
^[109]
[2004] FMCA
398.
^[110]
[2004] FMCA 398,
[13].
^[111]
[2004] FMCA 398,
[14].
^[112]
[2004] FMCA 640,
[8].
^[113]
See further 8.4
below.
^[114]
[2003] FMCA
132.
^[115]
[2003] FMCA 132,
[36].
^[116]
[2003] FMCA 132,
[41].
^[117]
[2003] FMCA
531.
^[118]
(2001) 162 FLR
433.
^[119]
(2001) 162 FLR 433, 441
[22].
^[120]
See discussion in 8.3.2
above.
^[121]
[2001] FMCA
52.
^[122]
See Horman v Distribution Group Ltd [2002] FCA 219, [45]. Note, however,
that Emmett J raised some queries regarding Raphael FM’s description of a
Calderbank letter as ‘defective’. As Emmett J noted, there
are no technical requirements for a Calderbank letter:
[44].
^[123]
[2002] FMCA
29.
^[124]
[2002] FMCA 29,
[64].
^[125]
[2001] FCA
1150.
^[126]
[2001] FCA 1150,
[2].
^[127]
[2000] FCA
1582.
^[128]
[2000] FCA 1582, [71]. See also Ingui v Ostara (No 2) [2003] FMCA
531.
^[129]
[2004] FMCA
402.
^[130]
[2004] FMCA 402,
[6].
^[131]
Australian Medical Council v Wilson (1996) 68 FCR 46, 55
(Sackville J); Waters v Public Transport Corporation (1991) 173 CLR 349,
393 (McHugh J); Mayer v Australian Nuclear Science & Technology
Organisation [2003] FMCA 209.

^[132]
See Minns v New South Wales [2001] FCA 704; Hollingdale v Northern
Rivers Area Health Service [2004] FMCA 721; Tate v Rafin [2000] FCA
1582, [51], [66]-[69].

^[133]
[2004] FMCA
721.
^[134]
[2004] FMCA 721,
[19].
^[135]
[2007] FCA
974.
^[136]
[2007] FCA 974,
[34]-[39].
^[137]
Cooke v Plauen Holdings Pty Ltd [2001] FMCA 91; Rispoli v Merck Sharpe
& Dohme (Australia) Pty Ltd (No 2) [2003] FMCA 516; Howe v Qantas
Airways Ltd (No 2) [2004] FMCA 934; Kelly v TPG Internet Pty Ltd (No
2) [2005] FMCA
291.
^[138]
McBride v Victoria (No 2) [2003] FMCA 31; Ho v Regulator Australia Pty
Ltd (No 2) [2004] FMCA
402.
^[139]
McBride v Victoria (No 2) [2003] FMCA 31, [7]-[8]; Ho v Regulator
Australia Pty Ltd (No 2) [2004] FMCA 402, [17]; Access For All Alliance
(Hervey Bay) Inc v Hervey Bay City Council [2007] FCA 974,
[18].
^[140]
[2003] FMCA
313.
^[141]
[2003] FMCA 313, [7]-[8]. This approach was accepted as correct by Driver FM in
Ho v Regulator Australia Pty Ltd (No 2) [2004] FMCA 402,
[16].
^[142]
[2007] FCA
974.
^[143]
[2007] FCA 974, [18]. See also
[22].
^[144]
Cooke v Plauen Holdings Pty Ltd [2001] FMCA 91, [44]. Note in Ho v
Regulator Australia Pty Ltd (No 2) [2004] Driver FM reconsidered his
decision in Cooke in light of the decision of McInnis FM in McBride v
Victoria (No 2) [2003] FMCA 313 and expressed a preference for the approach
taken by McInnis
FM.
^[145]
Rispoli v Merck Sharpe & Dohme (Australia) Pty Ltd (No 2) [2003] FMCA
516, [7]; Kelly v TPG Internet Pty Ltd (No 2) [2005] FMCA 291, [7]. Cf
Ho v Regulator Australia Pty Ltd (No 2) [2004] FMCA 402,
[16].
^[146]
Rispoli v Merck Sharpe & Dohme (Australia) Pty Ltd (No 2) [2003] FMCA
516,
[7].
^[147]
[2003] FMCA 516, [9],
[11].
^[148]
Howe v Qantas Airways Ltd (No 2) [2004] FMCA 934,
[14].
^[149]
[2004] FMCA
526.
^[150]
[2004] FMCA 526,
[92].
^[151]
(1993) 46 FCR 225,
231-234.
^[152]
[2004] FMCA 526, [96]. In relation to the behaviour of a respondent in
proceedings before HREOC, see Ho v Regulator Australia Pty Ltd (No 2)
[2004] FMCA 402, discussed at 8.3.5
above.
^[153]
[2001] FMCA
58.
^[154]
[2001] FMCA 58,
[27].
^[155]
[2003] FMCA
210.
^[156]
[2003] FMCA 210,
[8].
^[157]
[2001] FMCA
108.
^[158]
[2001] FMCA 108,
[19].
^[159]
[2004] FMCA
640.
^[160]
[2004] FMCA 640,
[8].
^[161]
[2004] FMCA 640,
[9].
^[162]
[2004] FMCA 640,
[9].
^[163]
[2005] FMCA
87.
^[164]
[2005] FMCA 87,
[19]-[20].
^[165]
Part 2 of Schedule 3 of the FMC Rules provides that O 23 (except rules 14 and 15
which are not relevant for present purposes) of the Federal Court Rules
applies to the FMC. See also Batzialas v Tony Davies Motors Pty Ltd
[2002] FMCA 243,
[112]–[113].
^[166]
For a useful discussion of the law on when a Court might ‘otherwise
order’, see Port Kembla Coal Terminal Ltd v Braverus Maritime Inc. (No
2) (2004) 212 ALR 281, 284 [16]–[18] where Hely J approved the
comments of Heerey J in Wills v Bigmac Pty Ltd (Unreported, Federal Court
of Australia, Heerey J, 9 December 1994,
[13]).
^[167]
See O 23, r 11.

^[168]
Order 23 was amended by Federal Court Amendment Rules 2004 (No 1) 2004 No
38, effective 23 March
2004.
^[169]
McDonald v Parnell Laboratories (Aust) (No 2) [2007] FCA 2086,
[20].
^[170]
King v Yurisich (No 2) [2007] FCAFC
51.
^[171]
Calderbank v Calderbank (1975) 3 All ER
333.
^[172]
Unreported, Federal Court of Australia, Heerey J, 22 March
1996.
^[173]
Unreported, Federal Court of Australia, Heerey J, 22 March 1996,
[51].
^[174]
(2004) 212 ALR
281.
^[175]
(2004) 212 ALR 281,
[28].
^[176]
[2003] FMCA 262,
[6].
^[177]
[2003] FMCA 262, [6]. Note that Driver FM went on to order that each party bear
its own costs in this matter notwithstanding the applicant’s success. He
reasoned that the successful applicant was disentitled to a costs order in her
favour on the basis of her refusal of an ‘exceptionally generous’
settlement offer (which was a Calderbank offer) and the manner in which
she had conducted the proceedings:
[11].
^[178]
[2003] FMCA 516,
[10].
^[179]
[2003] FMCA 516,
[11].
^[180]
[2004] FCA 1600.

^[181]
[2004] FCA 1600,
[5].
^[182]
[2004] FCA 1600,
[6]-[7].
^[183]
[2004] FCA 1600,
[12].
^[184]
[2005] FMCA
700.
^[185]
[2005] FMCA 700,
[7].
^[186]
[2005] FMCA
846.
^[187]
See San v Dirluck Pty Ltd (2005) 222 ALR
91.
^[188]
[2005] FMCA 846, [8].

^[189]
[2008] FMCA
38.
^[190]
[2008] FMCA 38,
[32]-[33].
^[191]
[2002] FMCA
197.
^[192]
(1999) 198 CLR 334. The majority of the High Court in this matter noted that s
47 applies at a stage after which an order for costs has been made
– it may, therefore, be raised in the course of enforcement proceedings in
respect of a costs order. The majority expressed the view that a ‘court or
tribunal’ for the purpose of s 47 means a State court or tribunal and
further that ‘s 43 of the Federal Court of Australia Act provides as to
the costs of proceedings in that Court and, thus, otherwise provides for the
purpose of s 79 of the Judiciary Act’: 361-362 [63]-[65]. Note also
Hinchliffe v University of Sydney (No 2) [2004] FMCA 640, in which costs
were awarded against a legally aided applicant, without discussion of either the
Legal Aid Commission Act 1979 (NSW) or the decision in
Minns.