Case: Standish v University of Tasmania (1989) 28 IR 129
Outcome: considered
In dealing with an application for costs under s 347(1) of the Act , in Standish v University of Tasmania (1989) 28 IR 129, Lockhart J was called on to decide whether the proceeding had been instituted "without reasonable cause". His Honour drew a distinction between the pursuit of an argument which does not succeed and the institution of a proceeding which is misconceived in the sense of being incompetent: see at 138-9. This distinction may, in my view, assist in determining whether conduct is unreasonable for the purposes of s 824(2). The prosecution of any incompetent or hopeless case can be regarded as "an unreasonable act" within the meaning of s 824(2). Conversely, in my opinion, the pursuit of a contentious, and ultimately unsuccessful, argument is not an unreasonable act. In my view the applicant's defence of its pleadings in the first strike-out application falls into the latter category. I take a different view of the applicant's conduct in relation to the second strike-out application. The second further amended statement of claim contained the same major deficiencies as its predecessor insofar as it dealt with the Part XA claim. The applicant instituted but then withdrew an application for leave to appeal from my decision. It persisted with pleadings which were inconsistent with my reasons for striking-out the first amended statement of claim. In so persisting, I consider that the applicant acted unreasonably for the purposes of s 824(2). The second further amended statement of claim also sought to plead a cause of action under Part 16. That aspect of the pleading failed by reason of embarrassment, not because it was untenable. I do not consider that it was unreasonable for the applicant to pursue the Part 16 aspect of its claim. In my view it is appropriate to order that the applicant pay half the respondent's costs of the second strike-out application. 37 There remains the issue of whether the applicant should pay the respondent's costs thrown away in relation to the hearing on 9 May 2007. In my view such an order should be made. The hearing did not proceed on that day because the applicant had failed to comply with the Court's directions as to the filing and service of submissions relating to the costs issue. This had occurred because of a unilateral decision by the applicant that it wished to pursue settlement discussions with the respondent. Had it wished to be relieved of the obligation to file submissions, the appropriate course was to apply to the Court to vary the directions which had earlier been made. Had it done so costs would not have been thrown away on 9 May 2007, although costs of any motion to vary the orders may have been payable. In omitting to comply with the Court's directions and not seeking, in an appropriate manner, to be relieved of its obligation the applicant acted unreasonably. 38 The respondent seeks to have any costs order in its favour paid on an indemnity basis. I accept that costs might be awarded on such a basis under s 824(2) in appropriate cases. That is because, if the requirements of s 824(2) are satisfied, the fetter imposed by s 824(1) is removed and the Court enjoys the same wide discretionary power which is conferred by s 43 of the Federal Court of Australia Act .