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- Unreported Judgment
State of Queensland v Bell QCATA 176
State of Queensland & Anor v Bell  QCATA 176
State Of Queensland
15 July 2016
Dr Cullen, Member
11 November 2016
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – APPEALS AS TO COSTS – RELEVANT PRINCIPLES – WHERE WRONG EXERCISE OF DISCRETION – where the respondent sought compensation in an anti – discrimination claim – where both parties were partially successful – where the tribunal awarded the respondent two thirds of her costs – where the applicants seek leave to appeal the decision to exercise the costs discretion – whether there is a reasonable case that the costs discretion miscarried – where the tribunal operates under a ‘no costs’ presumption – whether a costs order is required in the interests of justice – whether the applicants would suffer substantial injustice
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 100,102, 142(3)(a)(iii)
Australian Securities and Investments Commission v Jorgensen  QCA 20
Australian Trade Commission v Disktravel  FCA 62
Beasley v Department of Education and Training  VCAT 2044
Bew v Bew  2 Ch 467
BHP Billiton Iron Ore Pty Ltd v National Competition Council (No 2)  FCA 557
Bowen v Alsanto Nominees Pty Ltd  WASCA 39
Charles Osenton and Co v Johnston  AC 130
Falconbridge Pty Ltd v Yarra CC  VCAT 2449
Federal Commissioner of Land Tax v Jowett (1930) 45 CLR 115
House v The King (1936) 55 CLR 499
In Re the Will of FB Gilbert (dec) (1946) SR (NSW) 318
Kett v Ward  WASCA 139
Lord Haven Pty Ltd v Greater Dandenong  VCAT 1873
Lowe v Victims of Crime Assistance Tribunal  VCAT 1092
Mildura Rural CC v Victorian Work Cover Authority  VCAT 2366
Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002  198 ALR 59
Murtough v New South Wales Bar Association  NSWADT 166
Norbis v Norbis (1986) 161 CLR 513
Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)  QCAT 412
Road Chalets Pty Ltd v Thornton Motors Pty Ltd (in liq) (1986) 47 SASR 532
Salon Today Pty Ltd v MMIR Pty Ltd  NSWADT 71
Sanderson v Blyth Theatre Co  2 KB 533
Souter v Condor Developments Pty Ltd  WASCA 227
Styles v Murray Meats Pty Ltd  VCAT 2142
Swain Mason v Mills & Reeve (a firm)  EWCA Civ 498
Talbot v Truslove (1926) 28 WALR 86
Tamawood Ltd & Anor v Paans  QCA 111
Tano Holdings Pty Ltd v Mornington Peninsula SC  VCAT 2447
Thiess v TCN Channel 9 Pty Ltd (No 5) (1994) 1 Qd R 156
Velissaris v Fitzgerald  VSCA 152
Williams v Lewer  2 NSWLR 91
Woden Valley Glass v Psaila (1993) 122 ALR 387
APPEARANCES (if any):
Mr C Murdoch of Counsel, instructed by Crown Law
Mr S Keim SC of Counsel, instructed by NR Barbi Lawyers
REASONS FOR DECISION
- This contested application concerns a costs order by an anti-discrimination tribunal in a sexual harassment case. The applicants seek leave to argue that it should be set aside on appeal because the decision on which it is based is marred by vitiating error and that an order that each party bear their own costs of the proceeding be substituted.
- The application centres upon the proposition that there is a reasonably arguable case that the costs discretion miscarried and must be re-exercised to avoid substantial injustice.
- The applicants also contend that it would be to public advantage for the appeal tribunal to give reasoned consideration to the subject matter of the proposed appeal in light of QCAT’s stated function of ensuring that like cases are treated alike in achieving the statutory object of promoting and enhancing the quality and consistency of tribunal decisions.
The tribunal hearing
- The parties were both employed as line managers by Queensland Health. The first applicant was the respondent’s supervisor.
- The respondent alleged she was bullied at work in early 2012 because she had rejected a number of the first applicant’s sexual overtures at a work function just prior to Christmas 2011. She sought compensation for hurt and humiliation of between $80,000 – $100,000. The first applicant denied making any sexually suggestive comments or humiliating remarks to the respondent and alleged that the claim had been concocted by the respondent to cover up poor work performance.
- The hearing in this matter was conducted over five days. Both parties were legally represented by Senior Counsel. The transcript indicates that cross-examination of the respondent about her claims was distinctly adversarial and sustained. Ultimately, the respondent succeeded in proving that the first applicant had made all of the disputed statements.
- Only one of the statements was found to be legally discriminatory and the suggested retaliatory motive for the bullying was rejected.
- The applicants were held jointly liable to pay the respondent $9,000 compensation for an aggravated psychological injury, embarrassment and humiliation. The respondent, was awarded two-thirds of her legal costs, following submissions by the parties in relation to that particular issue.
The leave requirement
- The leave limitation on the right of appeal acts as a filter against unwarranted reconsideration of procedural issues and costs orders in tribunal proceedings. It is one of the mechanisms used to distinguish between those cases that justify the dedication of finite appeal tribunal resources, and those which do not.
- A particularly tight rein is kept on dissatisfied parties with “long purses or a litigious disposition” to stop them from effectively transferring costs decisions to appeal bodies. This is partly, if not primarily, because an appeal body will rarely be in a better position than a first instance decision maker to decide what the interests of justice require to be done about costs in a specific situation.
- A major hurdle confronting the applicants is the strong presumption in favour of the legal correctness of a first instance costs order. The appeal tribunal will presume that the “generous margin of discretion” was exercised properly, unless confidence in it can somehow be shaken to the point that allowing the order to stand might be substantially unjust in all the circumstances.
- In discussing this important point of principle in his textbook on costs, Professor Dal Pont says:
“A mere difference of opinion between the trial judge and the appellate tribunal is insufficient to oust the presumption, for ‘it would be wrong to determine the parties’ rights by reference to a mere preference for a different result over that favoured by the judge at first instance, in the absence of error on his part’. An appellate court is not entitled to substitute its own decision for that the subject of the appeal only because it prefers a different result or thinks a different result would be more just and equitable. As such, it has been said that ‘it is not for an appellate court even to consider whether it would have exercised the discretion differently unless it has first reached the conclusion that the judge’s exercise of his discretion is flawed’.” (citations omitted)
- As Viscount Simon LC explained in Charles Osenton and Co v Johnston:
“To take the case out of the ordinary situation in which, wherever a discretion is to be exercised, minds may differ on the result, the appellate court must discover some error of principle in the exercise of the trial judge’s discretion, a consideration of irrelevant matters or some other manifest mistake. Examples of circumstances where this may be so include where the trial judge lacked the jurisdiction to make an award of costs, took the mistaken view that he or she had no discretion as to costs, made an order contrary to an established rule of law or practice without justification, applied a rule of law or practice without giving proper consideration to the exercise of the discretion, took into account a matter unrelated to the institution or conduct of the suit, or made the order as a result of a misapprehension of the facts or the [appellate] court is forced to the conclusion that the various factors have not been balanced fairly in the scale.” (citations omitted)
- However, where an applicant demonstrates “some good reason, over and above differing opinions about what would have been the best costs order in the particular circumstances” such as unreasonableness, legal mistake or patent injustice, the appeal tribunal has “both the power and duty” to intervene. Proposed appeal grounds must be framed in a way that clearly identifies the true nature of the alleged error, its unjust effect and what needs to be done by the tribunal to rectify it.
The ‘no evidence’ ground
- The applicants complain that the tribunal finding that their litigation conduct increased the hearing costs is legally flawed because it is based on evidence that was incapable of supporting the finding as a matter of law. Their submission is that it was not open to the tribunal to conclude that they added to the costs of the proceeding by pursuing a failed positive case about poor work performance. The applicants say that the evidence about poor work performance had to be called anyway, to answer the rejected allegations made against them by the applicant.
- The tribunal actually found that both parties added to the length and complexity of the proceedings by, on the claimant’s part, pursuing unsubstantiated claims and, on the applicant’s, by making meritless and unsuccessful credibility attacks. These findings relate to matters of fact and are unimpeachable on appeal unless the contrary conclusion was the only rational one open on the evidence available.
- The tribunal was much better positioned than the appeal tribunal is now to assess whether, and to what extent, the applicants’ allegation that the respondent had concocted a story increased the costs of the proceeding by more than the respondent’s losing claims. There is no rule of reason or law of logic compelling the finding the applicants now press for.
The misapplication grounds
- The second and third proposed grounds both posit that the tribunal’s partial costs award was “illogical and irrational” because:
- the applicants had necessarily incurred costs of successfully defending major planks of the respondent’s case;
- there was a yawning gap measured in tens of thousands of dollars between the compensation claimed and the amount received; and
- there was no finding that the respondent was impecunious.
- The applicants claim that the tribunal misapplied the statutory exception to the general rule against costs in the QCAT Act by wrongly:
- ignoring unspecified countervailing considerations reducing the weight of the respondent’s reliance on legal representation as a relevant costs factor; and
- taking account of the financial consequences on the respondent of bringing the proceedings.
- The legal proposition implied in ground four is that neither party was so overwhelmingly successful in the proceeding as to justify a costs order at all and awarding the respondent two thirds of hers illogically and unreasonably underweighted her substantial overall failure.
- None of these grounds are likely to succeed if leave is granted. Rather, they confirm that describing reasoning as ‘illogical’ or the like in grounds of appeal may, as Gleeson CJ observed in Re Minister for Immigration and Multicultural Affairs; ex parte Applicant S20/2002, “…merely be an emphatic way of expressing disagreement with it”.
- We suspect that what the applicants really mean is that, measured by reference to the party’s relative success, the respondent should not have recovered more than one quarter of her costs, if any. However, the tribunal plainly recognised that partial loss was a ‘countervailing consideration’ for reducing the amount of costs recoverable from the applicants and gave detailed and careful consideration to the respondent’s mixed success.
- The assessment of quantum, as distinct from liability, is ultimately an evaluative one of degree. It is largely based on impression and intuition involving the weighing up of incommensurables.
- Where justice requires costs to be awarded at all, overall outcomes generally count more than the relative measure of success each party enjoys on intermediate issues.
- However, the power in s 102(1) QCAT Act to make an order requiring a party to pay another’s costs is expressed to be for “all or a stated part”.
- Middleton J accepted in BHP Billiton Iron Ore Pty Ltd v National Competition Council (No 2) that it may be appropriate in some cases:
“… to consider … the relative merits or strengths of the lost issue or inquiry, whether the length of the proceedings had been greatly increased by the lost issue or inquiry on which the successful party failed, and whether the issue or inquiry on which the successful party failed otherwise was of sufficient significance in proportion to the whole case to warrant a special order to deprive that party of the costs of that issue”.
- But, as the Western Australian Court of Appeal noted in Bowen v Alsanto Nominees Pty Ltd:
“To embark as a general practice upon an analysis of which party was successful on each issue, or necessarily deprive a successful party of some portion of its costs if it has lost on a particular issue, would be likely to add further uncertainty and complexity to the outcome of litigation, derogate from the prospect of settlement, and oblige the court to hear lengthy and frequent arguments in relation to costs as an additional burden on its resources and the costs of the parties… Litigation is time-consuming, expensive and burdensome enough already. In addition, while parties should be encouraged to consider carefully what matters they put in issue, justice may not be served if by too ready a resort to deciding questions of costs according to success on particular issues, parties are dissuaded by the risks of costs from canvassing all issues which might be material to the decision in the case…”
- There is no indication in s 102(1) QCAT Act that the winning party may only be allowed the percentage of costs reflecting the substantial issue(s) on which it succeeded; and even when it is appropriate to do so, an apportionment of costs need not be mathematically precise to be legally just and equitable. Thus, even if it is not exactly reflective of her proportionate success, there is nothing “illogical or irrational” in the percentage of costs awarded to the respondent.
- Neither the tribunal, nor the parties, can know whether any time would have been saved if the respondent was put to proof only on the compensable incident on 17 December 2011 – or if it was more or less than the hearing time spent on resolving the issues of fact raised in the applicant’s case. If there were any nebulous savings, as near was this tribunal can now estimate, the savings are unlikely to exceed the legal costs relating to approximately 1.7 days that the respondent must still fund from her own resources.
The irrationality or unreasonableness ground
- The last live ground continues the recurring theme that even if it did not act on mistaken facts in apportioning costs, the tribunal nevertheless misapplied the ‘demands of justice’ exception to the facts of the case and, consequently, in exercising its discretion to award costs at all, acted unreasonably and irrationally.
- Counsel for the applicants concedes that the fate of the leave application rests on the chances of this ground succeeding on appeal because not even the combined force of all the rest is stronger.
- A reasonable decision is not a uniquely right one. It involves matters of degree about which contrary – even opposite – conclusions can be reasonably reached on the same body of evidence by different lines of reasoning or by reference to other determinants without either being demonstrably right or manifestly wrong.
- An irrational decision, on the other hand, lacks an intelligible justification or can only be explained by some misconception, bias or defective reasoning and is not within the permissible range of rational decisions open to a reasonable person.
- The financial burden of a tribunal proceeding is usually left to lie where it falls, with neither party having to pay the other’s costs because of the provisions contained in s 100 QCAT Act. The so-called ‘no costs’ rule reflects the less formal and more efficient procedures of the tribunal and is aimed at protecting litigants from the adverse costs consequences of self-representation. Consequently, successful parties should not have any anticipation of costs in the tribunal.
- However, an order to “pay all or a stated part of the successful party’s costs” may be imposed upon a losing party under the exception in s 102(1) QCAT Act, if required by the overall interests of justice.
- In deciding whether, and to what extent, the interests of justice trigger the costs discretion, the tribunal may (not must) have regard to the matters mentioned in s 102(3) QCAT Act. The stated factors are: whether a party acted in a way that unnecessarily disadvantaged another, the nature and complexity of the dispute, the relative strengths of the claims, the financial circumstances of the parties and, the widest in scope, “anything else the tribunal considers relevant”.
- It is important to remember that the statutory power to award tribunal costs is controlled solely by what the interests of justice require, not whether any one or more of the considerations stated or implied in s 102(3) exist. Those factors are not ‘rules in themselves’. Nor are they entitling criteria to be met. Rather, they are indicative (but not exhaustive) of what costs consequences the relevant concept of justice demands in a given case. Not all will be as relevant or carry the same weight in every case.
- The New South Wales Administrative Decisions Tribunal has described phraseology similar to s 102(3)(f) in a comparable statute as:
“… very, very wide words, quite deliberately chosen by the Parliament, which quite clearly enjoin this Tribunal to look very carefully at the concept/principle of fairness and to widen the scope, without restriction, of the various aspects of the litigation – indeed, all the aspects of the litigation – that may result in a finding that the Tribunal is satisfied that it is fair to award costs.”
- Examples of considerations encompassed by the catch-all consideration tending to influence the discretionary process include: the enabling enactment’s policy objectives, the hearing length and subject matter, the dollar amount at stake, the effectiveness of any departmental steps to avoid, minimise or moderate litigation, inefficiency, whether both parties were legally represented, how mixed the success was and the extent to which a refusal to order costs would diminish the fruits of victory.
- Others include whether:
- the issues were contested in an adversarial manner and ‘vigorously’, ‘forcefully’ and ‘fiercely’;
- the proceeding was particularly emotionally and financially draining;
- the applicant had signalled intention to seek costs;
- a pre-claim internal investigation was conducted properly or at all; and
- the comparative capacity of parties to meet their own and successful opponent’s costs differs.
- A party is clearly not entitled to costs for merely succeeding, being legally represented in, or financially disadvantaged by, complex litigation. In saying this, all can have a material bearing, to greater or lesser degrees, on whether the balance of the interests of justice are strong enough to overwhelm and dislodge the statutory presumption against costs.
- According to a former President of the tribunal, in Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2):
“Under the QCAT Act the question that will usually arise in each case in which costs are sought is whether the circumstances relevant to the discretion inherent in the phrase ‘the interests of justice’ point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100.”
- However, this statement does not authorise or justify an uncritical application of the general rule inconsistent with the responsibility to consider the issue “according to rules of reason and justice”.
- On the basis that it is legitimate to have regard to developed practices and the way a particular type of hearing has been historically dealt with – including by a predecessor body operating under comparable costs provisions – the approach taken in Tamawood Ltd & Anor v Paans provides “guidance about the circumstances in which it may be in the interests of justice for this tribunal to award costs against parties” under the QCAT Act.
- In that case, Keane JA postulated that, even in a ‘no cost’ regime and all other things being equal, it would be both irrational and inimical to the interests of justice to:
- deter legally unsophisticated or vulnerable parties from enforcing ‘just claims’ via complex adversarial litigation by denying them the costs of beneficial legal assistance; or
- allow success in litigation to be eroded by the unrecovered cost of ‘reasonably necessary’ (and invariably very expensive) legal representation; or
- treat as a disqualifying factor the choice of litigation as the means of redressing a wrong over other equally legitimate and available but not necessarily as effective alternative dispute resolution options.
- The tribunal identified the “key matters” pointing “compellingly” to a costs award in the applicants favour as:
- her success on a strong case of sexual harassment in relation to one allegation and an arguable but unsuccessful one in relation to the other three;
- she would have been much better off financially if she had not claimed compensation for the harm done to her at all;
- eroding her modest award by the high costs of enforcing her rights was contrary to the interests of justice; and
- ultimately defeating the false case mounted against her.
- In our view, the last point has particular significance here. By steadfastly denying the conduct that gave rise to the litigation, the first applicant put the respondent to the expense of conquering the denials. The tribunal expressly found that if an effective internal investigation had been conducted, a contested hearing may have been avoided altogether. The unfortunate result of a hearing of this nature is, by virtue of the need to test evidence, to cause complainants further distress.
- This case was complex enough to warrant the professional assistance and experienced representation of QCs to prepare and present the best case for both parties.
- We consider the objectives of the anti-discrimination legislation under which the proceedings were commenced to have a human rights focus, intended to be socially beneficial. This legislation should not be seen as analogous to commercial claims where citizens seek redress for civil wrongs by way of financial compensation. Complainants with genuine claims of unlawful discrimination and harassment should not be discouraged in their pursuit of human rights based objectives by fear of adverse costs consequences, and granting costs to the respondent here is consistent with policy aims.
- The respondent is a middle-ranking public servant. The first applicant, by comparison, is indemnified against the cost of this litigation and has been represented throughout by State-funded lawyers. That the applicants are better placed to sustain a costs order is, on this information alone, self-evident.
- Here, the respondent was, in part, successful in her claim. She has had some financial success, but has also had the success that is attenuated by the public recognition of her human rights, and the acknowledgment that comes from her having pursued that which was wrong. She may have lost without her lawyers’ help. The interests of justice clearly demand that she recover the financial costs she incurred in enforcing her rights to be treated with dignity in her workplace.
- In summary, therefore, awarding a successful applicant in an anti-discrimination case two thirds of the costs of bringing the proceeding in the circumstances of this case is not irrational, unreasonable or plainly unjust and the applicants have not shown that any relevant consideration was ignored or collateral matter taken account of.
- The tribunal plainly did not allow the applicant a portion of her costs merely because she had legal representation or was financially disadvantage by litigating. They were both correctly treated as relevant, but not conclusive, factors and given the weight the tribunal considered they deserved in all the circumstances.
- It correctly stated and applied the other relevant considerations informing the costs discretion consistently with the governing statute and legal principles. There is no indication of misapplication in either the reasoning or result.
- As the threshold necessary to support the granting of leave to appeal has not been reached, the application is refused.
 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) s 142(3)(a)(iii).
 Australian Securities and Investments Commission v Jorgensen  QCA 20  (Keane JA).
 In Re the Will of FB Gilbert (dec) (1946) SR (NSW) 318, 323; see the comments in Murtough v New South Wales Bar Association  NSWADT 166 about the need for appellant bodies to be vigilant to stop wealthy litigants from abusing the no cost rule by acting unreasonably or oppressively towards opponents.
 Swain Mason v Mills & Reeve (a firm)  EWCA Civ 498  (Davis LJ, with whom Richards LJ and Lord Neuberger MR concurred).
 Bew v Bew  2 Ch 467; Talbot v Truslove (1926) 28 WALR 86; Road Chalets Pty Ltd v Thornton Motors Pty Ltd (in liq) (1986) 47 SASR 532, 552 (O'Loughlin J).
 Velissaris v Fitzgerald  VSCA 152  (Maxwell P).
 Gino Dal Pont, Law of Costs (Lexis Nexis Butterworths Australia, 3rd ed, 2013) [20.44].
  AC 130, 138.
 Gino Dal Pont, Law of Costs (Lexis Nexis Butterworths Australia, 3rd ed, 2013) [20.44] citing Sanderson v Blyth Theatre Co  2 KB 533, 534-5.
 House v The King (1936) 55 CLR 499, 504-505.
 Gino Dal Pont, Law of Costs (Lexis Nexis Butterworths Australia, 3rd ed, 2013) [20.31]; citing Federal Commissioner of Land Tax v Jowett (1930) 45 CLR 115, 121.
 QCAT Act s 100.
  198 ALR 59.
 at  –  of the reasons.
 Australian Trade Commission v Disktravel  FCA 62.
 cf Thiess v TCN Channel 9 Pty Ltd (No 5) (1994) 1 Qd R 156, Kett v Ward  WASCA 139; Souter v Condor Developments Pty Ltd  WASCA 227 -.
  FCA 557.
  WASCA 39.
 Woden Valley Glass v Psaila (1993) 122 ALR 387.
 Norbis v Norbis (1986) 161 CLR 513, 518.
 Murtough v New South Wales Bar Association  NSWADT 166; cited in Gino Dal Pont, Law of Costs (Lexis Nexis Butterworths Australia, 3rd ed, 2013) [8.91].
 Lord Haven Pty Ltd v Greater Dandenong  VCAT 1873.
 Tano Holdings Pty Ltd v Mornington Peninsula SC  VCAT 2447 .
 Administrative Decisions Tribunal Act 1997 (NSW).
 Salon Today Pty Ltd v MMIR Pty Ltd  NSWADT 71.
 Tamawood Ltd & Anor v Paans  QCA 111.
 Beasley v Department of Education and Training  VCAT 2044 .
 Styles v Murray Meats Pty Ltd  VCAT 2142 -.
 Mildura Rural CC v Victorian Work Cover Authority  VCAT 2366 .
  QCAT 412 .
 Williams v Lewer  2 NSWLR 91, 95.
  QCA 111.
 Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)  QCAT 412 .
 Commercial and Consumer Tribunal Act 2003 (Qld).
 Tamawood Ltd & Anor v Paans  QCA 111 .
 Ibid .
 Ibid .
 Lowe v Victims of Crime Assistance Tribunal  VCAT 1092 ; Styles v Murray Meats Pty Ltd  VCAT 2142 ; Falconbridge Pty Ltd v Yarra CC  VCAT 2449 .
- Published Case Name:
State of Queensland & Anor v Bell
- Shortened Case Name:
State of Queensland v Bell
 QCATA 176
Carmody J, Member Cullen
15 Jul 2016