Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Dye v Commonwealth Bank of Australia & Anor [2012] NSWCA 220
• Hearing dates: 2 July 2012
• Decision date: 26 July 2012
• Before: Campbell JA at 1; Sackville AJA at 8; Preston CJ of LEC at 67.

Decision

1. Extend the time for the applicant to seek leave to appeal to 25 January 2011.

2. The application for leave to appeal against the orders made on 21 October 2010 that the applicant pay:

(a) the Bank's costs of the defamation proceedings which have been wasted in the sum of $250,000; and

(b) the Bank's costs of the stay application in the sum of $15,000,

be dismissed.

3. The applicant pay the Bank's costs of the application for leave to appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: PRACTICE AND PROCEDURE - whether Court has jurisdiction to entertain an application for leave to appeal from a wasted costs order made on an application under the Jurisdiction of Courts (Cross-Vesting) Act 1987 - availability of judicial review of costs order under s 69 of the Supreme Court Act 1970.
• Legislation Cited: Federal Court of Australia Act 1976 (Cth); Judiciary Act 1903 (Cth); Sex Discrimination Act 1984 (Cth); Trade Practices Act 1974 (Cth); Civil Procedure Act 2005; Jurisdiction of Courts (Cross-Vesting) Act 1987; Supreme Court Act 1970
• Cases Cited: Australian Competition and Consumer Commission v Maritime Union of Australia (2001) 114 FCR 472; Dye v Commonwealth Bank of Australia [2010] NSWSC 1236; Dye v Commonwealth Bank of Australia [2010] NSWSC 1237; Dye v Commonwealth Bank of Australia [2010] NSWSC 1238; Dye v Commonwealth Securities Ltd (No 2) [2010] FCAFC 118; Dye v Commonwealth Securities Ltd (No 2) [2012] FCA 407; Dye v Commonwealth Securities Ltd [2012] FCA 242; Federated Fire Engine-Drivers and Fireman's Association of Australasia v Broken Hill Proprietary Co Ltd (1911) 12 CLR 398; Fencott v Muller [1983] HCA 12; 152 CLR 570; Hearne v Street [2008] HCA 36; 235 CLR 125; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274; Neumann Contractors Pty Ltd v Traspunt No 5 Pty Ltd [2010] QCA 119; [2011] 2 Qd R 114; Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd [1982] HCA 7; 148 CLR 457; Re Wilcox; Ex parte Venture Industries Pty Ltd [1996] FCA 1497; Tangalooma Island Resort Pty Ltd v Miles (1989) 96 FLR 47; Thomas v State of New South Wales [2008] NSWCA 316; 74 NSWLR 34; Travelex Ltd v FCT [2010] HCA 33; 241 CLR 510; Wang and Liu v State of New South Wales [2011] NSWCA 321; Wentworth v Rogers (1986) 6 NSWLR 642
• Category: Principal judgment
• Parties: Vivienne Louise Dye (Applicant); Commonwealth Bank of Australia (First Respondent); Barbara Chapman (Second Respondent)
• Representation: Counsel: In Person (Applicant); P W J Gray SC; M Richardson (Respondents); Solicitors: Unrepresented (Applicant); Clayton Utz (Respondents)
• File Number(s): 2009/297559

Decision under appeal

• Citation: Dye v Commonwealth Bank of Australia [2010] NSWSC 1238
• Date of Decision: 2010-10-21 00:00:00
• Before: McClellan CJ at CL
• File Number(s): 2009/297559

Judgment

1 CAMPBELL JA: I have had the advantage of reading the draft judgments of Sackville AJA and Preston CJ of LEC. Like each of them, I would prefer not to express a final view about the correct construction of s 13(a) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 ('the Cross-Vesting Act'). However, I should say that I can see some difficulties in the way of concluding that s 13(a) would deprive this Court of jurisdiction to hear an appeal against the costs orders involved in the present case, if it were otherwise appropriate for leave to appeal to be granted.

2 In Neumann Contractors Pty Ltd v Traspunt No 5 Pty Ltd [2010] QCA 119; [2011] 2 Qd R 114 at [46], Muir J (Holmes and Chesterman JJA agreeing) approved the following statement of Hill J in Australian Competition and Consumer Commission v Maritime Union of Australia (2001) 114 FCR 472 at 487-8:

"It may be accepted that there will always be a question of degree involved where the issue is the relationship between two subject matters. The words 'in relation to' are wide words which do no more, at least without reference to context, than signify the need for there to be some relationship or connection between two subject matters: see Smith v Commissioner of Taxation (Cth) (1987) 164 CLR 513 at 533 per Toohey J and PMT Partners Pty Ltd (In liq) v Australian National Parks and Wildlife Service (1995) 184 CLR 301 at 328 per Toohey and Gummow JJ. But the phrase is both 'vague and indefinite': see per Taylor J in Tooheys Ltd v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 at 620. Like the phrase 'in respect of', the phrase 'in relation to' will not, at least normally, apply to any connection or relationship no matter how remote: see Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 167 CLR 45 at 51 per Dawson J. The extent of the relationship required will depend upon the context in which the words are used.

As Beaumont and Lehane JJ said in Joye v Beach Petroleum NL (1996) 67 FCR 275 at 285 in discussing a number of the cases dealing with 'relates to':

"... it will depend upon context whether it is necessary that the relationship be direct or substantial, or whether an indirect or less than substantial connection will suffice.' (References omitted.)"

3 In other words, the expression "in relation to" is capable of referring to any type of connection between two subject matters, but whether in any particular statutory provision the words bear the full width of meaning of which they are capable, is decided taking into account the context and purpose of the statutory provision in question. Similarly, in Travelex Ltd v FCT [2010] HCA 33; 241 CLR 510 at [25], French CJ and Hayne J said:

"It may readily be accepted that 'in relation to' is a phrase that can be used in a variety of contexts, in which the degree of connection that must be shown between the two subject matters joined by the expression may differ."

4 In their dissenting judgment in Travelex, Crennan and Bell JJ said, at [90]:

"... the expression 'made in relation to' is a wide one denoting a connection between 'supply' and the 'rights'. The precise relationship between the two will be governed by the context in which the expression is used."

See also Thomas v State of New South Wales [2008] NSWCA 316; 74 NSWLR 34 at [19]-[21] and cases there cited.

5 There is every reason for s 13(a) to prohibit an appeal against an order that transfers proceedings from one court to another. It is of obvious high practical importance that there be certainty about which court is entrusted with a piece of ongoing litigation. Making unappealable a first instance decision that such a transfer should occur is an effective way of giving effect to that policy. However, there is not the same pressing practical need to make all costs decisions that happen to be made at the same time as a decision to transfer proceedings unappealable.

6 Further, it is fundamental that appeals are brought against judgments and orders, not against reasons for judgment: Wang and Liu v State of New South Wales [2011] NSWCA 321 at [23] and cases there cited. Because an appeal lies against a judgment or order, the "decision ... in relation to the transfer" concerning which s 13(a) limits the right of appeal is the judgment or order that is appealed against, not the reasoning leading to that judgment or order. Even if an order concerning costs is made at the same time as an order that proceedings be transferred, they are still separate orders. It would be within ordinary language usage to say that:

(a) an order that proceedings be transferred is a 'decision ... in relation to the transfer";

(b) an order pronouncing who is to pay the costs of the application for transfer is a "decision ... in relation to the transfer".

(c) an order pronouncing who is to pay the costs of certain interlocutory steps that have already been taken is not a "decision ... in relation to the transfer", even if it is made at the same time as an order for the transfer of proceedings.

I would prefer to express no view about whether the only costs orders concerning which s 13(a) prohibits appeals, are orders pronouncing who is to pay the costs of the application for transfer.

7 Subject to these remarks, I agree with the reasons of Sackville AJA, and with the orders his Honour proposes.

8 SACKVILLE AJA: The applicant seeks leave to appeal from two costs orders. There is an issue as to the jurisdiction of this Court to entertain an appeal by reason of s 13(a) of the Jurisdiction of Courts (Cross-Vesting) Act 1987, ("Cross-Vesting Act"), to which I refer later. In any event, the applicant requires leave to appeal pursuant to Supreme Court Act 1970, s 101(2)(c). The Court has heard concurrent argument on the application for leave to appeal and on the appeal itself.

9 Both costs orders were made in a judgment given by McClellan CJ at CL on 21 October 2010: Dye v Commonwealth Bank of Australia [2010] NSWSC 1238. His Honour ordered the applicant:

• to pay the costs of her unsuccessful application to stay defamation proceedings she herself had commenced in the Supreme Court against the respondent ("the Bank"), assessed in the sum of $15,000 ("the stay costs order"); and
• to pay the Bank's costs of the defamation proceedings wasted by reason of the applicant's belated (but successful) application to transfer the defamation proceedings to the Federal Court pursuant to s 5 of the Cross-Vesting Act ("the wasted costs order").

10 The proceedings between the applicant and the Bank and associated entities and persons have a long and complex history. The proceedings culminated in a 94 day hearing in the Federal Court, which took place between March and December 2011. In a judgment delivered on 16 March 2012, Buchanan J dismissed claims made by the applicant against the Bank, Commonwealth Securities Ltd ("Comsec") (a subsidiary of the Bank) and employees of the Bank (collectively "the Bank Respondents"): Dye v Commonwealth Securities Ltd [2012] FCA 242.

11 The applicant's claims against the Bank Respondents, as ultimately pleaded, included allegations of sexual harassment, sex and disability discrimination, breach of contract, injurious falsehood and defamation. Buchanan J found that the allegations made by the applicant, many of which had been published in "an incandescent blaze of salacious publicity", were in substance false (at [2]). In a separate judgment, Buchanan J ordered the applicant to pay the Bank Respondents' costs of the Federal Court proceedings on an indemnity basis, assessed at $5.85 million: Dye v Commonwealth Securities Ltd (No 2) [2012] FCA 407, at [22]. His Honour's orders were expressed not to affect any costs orders made by the Supreme Court of New South Wales.

12 The applicant was represented by counsel at the hearing in the Federal Court and in the proceedings determined by the primary Judge. However, she was self-represented in her application for leave to appeal from the costs orders.

Background

13 It is not necessary to recount in detail the history of the litigation between the applicant and the Bank respondents. An outline is sufficient.

14 On 24 July 2008, the applicant, who had been an employee of Comsec, commenced the Federal Court proceedings. She sued Comsec for damages, relying on a number of causes of action including sexual harassment, discrimination on the ground of sex and "victimisation". Subsequently, the applicant added other officers of the Bank as respondents to these proceedings.

15 On 15 April 2009, the applicant commenced defamation proceedings in the Supreme Court against the Bank and an officer of the Bank. The substance of the applicant's pleaded case was that the Bank had published material falsely stating that the applicant had made false allegations of sexual harassment against the Bank and its officers. The Bank's defence included a plea that the statements complained of were substantially true: that is, that the applicant had indeed made false allegations (among other things) of sexual harassment.

16 The Bank engaged two different firms of solicitors to represent the Bank respondents in the Federal Court proceedings and the Bank in the Supreme Court proceedings. There was no evidence as to why the Bank took this course.

17 On 31 March 2010, the applicant sought a stay of the Supreme Court proceedings. By this time, the Federal Court proceedings had been fixed to commence on 6 September 2010. The basis of the stay application was explained by the primary Judge, as follows:

"It was submitted that [the] stay should be granted because the Federal Court proceedings should be given a priority, they were commenced first, and it is submitted that the resolution of those proceedings may have an impact upon the defamation proceedings. It was further submitted there is a public interest in having the Federal Court proceedings heard before the defamation proceedings."

Dye v Commonwealth Bank of Australia [2010] NSWSC 1236, at [7].

18 His Honour dismissed the stay application on 8 April 2010. However, he fixed the defamation proceedings for hearing, commencing on 15 November 2010.

19 Shortly before filing the stay application in the Supreme Court, the applicant sought leave to amend her statement of claim in the Federal Court proceedings in order to add causes of action in injurious falsehood and to add further allegations of sexual harassment. The application for leave to amend was refused by a single Judge of the Federal Court, but the applicant's appeal to the Full Federal Court was largely upheld on 14 September 2010: Dye v Commonwealth Securities Ltd (No 2) [2010] FCAFC 118.

20 Following the decision by the Full Court, the hearing date of 6 September 2010 for the Federal Court proceedings was vacated. The proceedings were re-listed to commence on 7 March 2011.

21 On 28 September 2010, the applicant applied to the Supreme Court for an order pursuant to s 5(1) of the Cross-Vesting Act transferring the defamation proceedings to the Federal Court. The application was opposed by the Bank on the ground that the defamation proceedings were ready for hearing, as scheduled, on 15 November 2010 and that the hearing should proceed. The Bank contended that factual findings in the defamation proceedings might well effectively resolve the Federal Court proceedings (which at that time were estimated to last for eight weeks).

The Transfer Judgment

22 The primary Judge, in a judgment delivered on 15 October 2010, concluded that:

"it is in the interests of justice that the matter in this Court be transferred to the Federal Court, and I will make that order in due course. However, it will be made with an order that the [applicant] be ordered to pay the costs of the [Bank] which have been wasted by reason of the commencement of the defamation proceedings in this Court, and the lateness of the application for their transfer to the Federal Court."

Dye v Commonwealth Bank of Australia [2010] NSWSC 1237, at [34].

23 His Honour observed (at [27]) that he had not found the matter easy to resolve. He set out (at [27]-[28]) the competing considerations as follows:

"There are reasons why, given the proximity of the hearing date and the fact that the matter is ready for hearing, the defamation proceedings should continue. The [applicant] chose to commence those proceedings in this court; the [Bank] has prepared itself to defend them, and has expended considerable monies related only to the defence of those proceedings.

If I make an order transferring the matter to the Federal Court, justice demands that the [applicant] pay the costs which will prove to have been unnecessarily incurred. If I do not order the transfer, the consequence may be that the same factual material will have to be examined in two courts, with the potential for considerable wastage of costs. It is impossible for me to gauge what the extent of that wastage might be, but from the ferocity of the current litigious activity, and the little I have been told about the time taken in various skirmishes to date, those costs could be considerable. There would also be the risk, which a court should in the interests of justice seek to avoid, of contradictory factual findings, particularly in relation to matters of credit."

24 In balancing these considerations, his Honour took into account (at [32]) that if a cross-vesting order was made, time at the Federal Court hearing would be taken up in resolving factual matters largely common to both cases. Thus the defamation case would not take up significant additional hearing time.

The Costs Judgment

25 A further hearing on costs took place on 21 October 2010, at which the parties adduced evidence. In a judgment delivered on that day, the primary Judge ordered that the applicant pay the Bank's costs "being costs of the defamation proceedings which have been wasted in the sum of $250,000": Dye v Commonwealth Bank of Australia [2010] NSWSC 1238, at [15].

26 His Honour accepted (at [2]) the Bank's evidence that it had spent over $1.1 million on professional costs in the defamation proceedings. He also accepted the evidence of Ms Noe, the Bank's solicitor, that a "significant proportion of the costs which have been spent on discovery, subpoenas and the proofing of witnesses have been wasted". Almost all of the work done on discovery in the defamation proceedings was a "mere repetition" of work done in the Federal Court proceedings. There was also significant repetition in the work done in issuing subpoenas and proofing evidence (at [3], [4]).

27 In his Honour's view (at [5]), the applicant had been poorly advised in bringing and maintaining defamation proceedings in the Supreme Court. Even before the statement of claim in the Federal Court had been amended to plead injurious falsehood, the defamation proceedings raised factual issues central to the Federal Court proceedings. Thus the defamation causes of action were part of the same Federal Court "matter" and were within the accrued jurisdiction of that Court. Accordingly, they could have been pleaded in the Federal Court proceedings, thereby avoiding the need for separate proceedings in the Supreme Court.

28 The primary Judge explained his approach to costs as follows:

"5. ... [The applicant] chose to commence proceedings in this Court and maintains them until recently with, as a consequence, a wastage of expenditure by the [Bank]. The interests of justice demand that the [Bank] be appropriately recompensed for that wastage. It is not sufficient for the [applicant] to submit, as was done on her behalf, that she only commenced the proceedings in this Court because that was the advice she was given. The [Bank] cannot be visited with the wasted costs of the advice given to the plaintiff.

6. It is also plain to me that if I now made an order for costs but provided for those costs to be assessed, I would inevitably be imposing upon these parties a further round of very significant litigation. It is impossible for me to identify the ultimate cost of those separate proceedings. But on any view, they would have to exceed $100,000 and I suspect would be substantially greater.

7. These parties have already been engaged in litigation over a number of years and on a number of fronts. As is plain from the solicitor/client costs that the defendant has incurred to date, the costs of the proceedings appear even now to be out of all proportion to the financial consequences of the issues at stake.

8. I do not believe it would be in the interests of justice for me to now make orders which would require these parties to engage in yet further complex litigation.

9. I am therefore satisfied that I should make an order in a quantified sum and do the best I can having regard to my experience in these matters and the evidence which has been placed before me and quantify the costs which the [applicant] must pay by reason of the transfer of the defamation proceedings to the Federal Court.

10. In her affidavit Ms Noe identified nine items in respect of which in part or whole it was suggested that costs had been wasted. I am only sufficiently confident that costs have been wasted in relation to items B [discovery], F [subpoenas], and H [proofing of witnesses] to make orders in a quantified sum in relation to those matters. It may be quite likely that the [Bank] will accordingly not receive an order which would meet the entirety of wasted costs but given the need to make an assessment at this point without further litigation, that must be accepted.

11. The amount claimed in relation to discovery is in excess of $363,000. I am not persuaded that party/party costs would be of that order. However, having regard to the evidence which Ms Noe has given as to the nature and complexity of the discovery issues and the many thousands of documents which have been involved, all of which would be repetitive of the matters to be discovered in the Federal Court proceedings, I have determined that it is appropriate to assess the costs thrown away in relation to discovery of $200,000.

12. In relation to subpoenas, the claim is $112,000. I am not persuaded that a sum of that order should be awarded. However, it is plain that there has been duplication, and that duplication is of significance. Doing the best I can, I determine that sum in the amount of $20,000.

13. Finally, in relation to the proofing of witnesses, the claim is for a sum in excess of $74,000. Again, I do not believe it appropriate to include a sum of that magnitude. But again doing the best I can, I am satisfied that there has been significant duplication, and I would determine the appropriate sum to be $30,000.

14. I accept that there will be wastage in relation to various directions hearings, briefing of counsel, and probably in relation to interrogatories. However, as I have indicated, I am not confident that I could do justice in awarding a specific sum in relation to those matters and I leave them out of account."

29 As I have noted (at [10]-[11] above), the Federal Court proceedings were resolved wholly in the Bank's favour.

The Application for Leave to Appeal

30 The applicant's summons seeking leave to appeal was filed out of time, on 25 January 2011. She has provided an adequate explanation for the delay and an order should be made extending time for the filing of the summons.

31 The applicant relied on four arguments to support her application for leave to appeal and the appeal itself:

(i) the defamation claims, prior to the amendment of the Federal Court statement of claim to include injurious falsehood causes of action, could not have been brought in the Federal Court proceedings as part of the same "matter";

(ii) the Supreme Court had no power to make a costs order as "the price" of an order transferring the proceedings:

(iii) there was no or no satisfactory evidence available to the primary Judge to enable him to quantify the wasted costs; and

(iv) the primary Judge did not take into account that the Bank could have applied to have the proceedings transferred to the Federal Court and therefore shared the responsibility with the applicant for the defamation proceedings continuing in the Supreme Court.

32 The fourth argument was not raised in the applicant's written submissions, but was embraced by her when the issue was referred to by the bench in argument in this Court.

Competency of the Application for Leave to Appeal

33 The Bank submitted that the application for leave to appeal was incompetent by reason of s 13(a) of the Cross-Vesting Act. According to Mr Gray SC, who appeared with Mr Richardson for the Bank, the effect of s 13(a) is that no appeal lies from a costs order made in connection with the disposition of a cross-vesting application. Mr Gray contended that this construction of s 13(a) was supported by s 12 of the Cross-Vesting Act.

34 Sections 12 and 13 of the Cross-Vesting Act provide as follows:

"Orders as to costs

12. Where a proceeding is transferred or removed to a court, that court may make an order as to costs that relate to the conduct of the proceeding before the transfer or removal if those costs have not already been dealt with by another court.

Limitation on appeals

13. An appeal does not lie from a decision of a court -

(a) in relation to the transfer or removal of a proceeding under this Act; or

(b) ..."

35 In the light of the Bank's submissions, it is necessary to consider whether this Court has jurisdiction to entertain the applicant's challenge to the costs orders. The general rule is that where there is doubt about a court's jurisdiction, the court should satisfy itself that it does indeed have jurisdiction: Federated Fire Engine-Drivers and Fireman's Association of Australasia v Broken Hill Proprietary Co Ltd (1911) 12 CLR 398 at 415, per Griffith CJ. Thus in Hearne v Street [2008] HCA 36; 235 CLR 125, at 135 [17], Kirby J observed that:

"It is conventional for courts to deal with matters or jurisdiction at an initial stage, for, without jurisdiction, other issues fall away. If there is no jurisdiction, a court normally has no business entering into arrangements about any substantive or procedural questions, except perhaps the consequential disposition of costs."

36 The Bank's contention has some force. As Mr Gray submitted, the expression "in relation to" in s 13(a) appear to be wide enough to encompass a decision that one party to the transferred proceedings pay some or all of the costs incurred in the proceedings prior to the order for their transfer. Mr Gray pointed out that Kirby P in Tangalooma Island Resort Pty Ltd v Miles (1989) 96 FLR 47, at 48, had referred to the expression in s 13(a) as "words of connection ... expressed in the widest possible terms."

37 Mr Gray argued that the Bank's construction of s 13(a) was bolstered by the proximity of s 12 (dealing with costs) to s 13(a). It was also supported by the clear purpose of the legislation which, so he contended, was to prevent appeals from discretionary orders within power: Re Wilcox; Ex parte Venture Industries Pty Ltd [1996] FCA 1497, at [131], per curiam.

38 There are, however, countervailing considerations. Contrary to the Bank's submissions, s 12 does not confer power on the court ordering the transfer of proceedings to make a costs order. The section confers such a power only on the court to which the proceedings are transferred. It is true that s 12 is drafted on the assumption that "another court" has power to make orders with respect to costs incurred in the proceedings before the date of the order transferring the proceedings. However, those orders will usually have been made in interlocutory proceedings independently of any application to transfer the proceedings under the Cross-Vesting Act. In any event, the source of the transferring court's power to make a costs order is not s 12 (see at [51] below). It follows that the proximity of s 12 to s 13(a) provides little guidance as to whether s 13(a) prohibits an appeal from a costs order of the kind made by the primary Judge.

39 There are good reasons not to give "in relation to", as used in s 13(a) of the Cross-Vesting Act, the widest meaning the expression is capable of bearing. It is one thing to deny a right of appeal from a decision to transfer proceedings because this is likely to save time, costs and uncertainty in relation to a preliminary matter that should "be quickly made and conclusively determined": Tangalooma Island, at 48. It is perhaps another to deny a right of appeal (or a right to seek leave to appeal) when the costs order relates not merely to the transfer application itself, but potentially to the costs of the entire proceedings up to the date the transfer order is made. As the present case shows, such an order may be for a very substantial sum.

40 Construing s 13(a) so as not to deny an appeal against a costs order of the kind made in the present case would not mean a proliferation of appeals. No appeal from a costs order can be made except with the leave of the Court: Supreme Court Act 1970, s 101(2)(c). A party ordered to pay the costs of interlocutory proceedings dealt with before the substantive proceedings are transferred under the Cross-Vesting Act is entitled to seek leave to appeal against the order. There is no obvious reason why the making of a costs order at the same time as the court orders the transfer of the proceedings should place the party subject to the order in a worse position so far as appeal rights are concerned.

41 I appreciate that in the present case the reasoning of the primary Judge indicates that the wasted costs order was made in one sense as the "price" for transferring the proceedings to the Federal Court. However, s 13(a) limits the right of appeal from a "decision ... in relation to the transfer ... of a proceeding under this Act". The question is whether the decision appealed from (in this case the wasted costs order) is in relation to the transfer of a proceeding under the Cross-Vesting Act, not whether the reasoning supporting the decision is in relation to the transfer.

42 For these reasons, in my view, despite the force of Mr Gray's submissions, it is arguable that s 13(a) of the Cross-Vesting Act should be read as prohibiting appeals from costs orders only insofar as the orders relate to the costs of the transfer application itself. If the argument is correct, s 13(a) would not render incompetent the application for leave to appeal from the costs orders. Neither of the costs orders concerns the costs of the transfer application itself.

43 Because the applicant is unrepresented this Court has not had the benefit of full argument on the construction of s 13(a). For this reason, if it is clear that the Court otherwise has jurisdiction to entertain the applicant's challenge to the costs orders, it is in my view preferable not to decide finally whether the application for leave to appeal is competent.

44 Mr Gray accepted that it would have been open to the applicant, had she been so advised, to seek an order in the nature of certiorari quashing the costs orders made by the primary Judge. Such an order could have been sought by her in this Court's original jurisdiction pursuant to s 69(1) of the Supreme Court Act 1970. One ground available to her would be an error of law appearing on the face of the record. The "record" for this purpose includes the reasons of the Court: s 69(3), (4).

45 Given that the applicant is unrepresented in these proceedings, I would be prepared to allow her to file a summons seeking prerogative relief on the grounds she has identified in her application for leave to appeal. This would enable the Court to deal with the substance of her arguments without any jurisdictional issue arising. Mr Gray did not suggest that any prejudice would be caused to the Bank if that course had to be followed.

46 In these circumstances, I propose to address the substance of the applicant's arguments. To do so has the advantage of not simply deferring consideration of those arguments until a summons in an appropriate form is filed.

Reasoning

The Federal Court's Accrued Jurisdiction

47 The primary Judge was clearly correct to hold that the applicant could have brought the defamation proceedings in the Federal Court even before the inclusion of the malicious falsehood causes of action (which arose under State law and thus were themselves within the accrued jurisdiction of the Federal Court). The Federal Court had jurisdiction to hear and determine the applicant's claim because she alleged, among other things, that the respondents had contravened provisions of the Sex Discrimination Act 1984 (Cth) and the Trade Practices Act 1974 (Cth) and that she was entitled to relief under those Acts. These pleaded causes of action constituted a matter "arising under any law made by the Parliament" in respect of which the Federal Court has original jurisdiction: Judiciary Act 1903 (Cth), s 39B(1A)(c).

48 The jurisdiction of the Federal Court includes its so-called "accrued jurisdiction" to deal with matters associated with matters in which the jurisdiction of the Court is invoked: Federal Court of Australia Act 1976 (Cth), s 32(1). In Fencott v Muller [1983] HCA 12; 152 CLR 570, the majority endorsed (at 606) the proposition that:

"a 'matter' is a justiciable controversy which must either be constituted by or must include a claim arising under a federal law but which may also include another cause of action arising under another law, provided it is attached to and not severable from the former claim."

49 The majority also endorsed (at 607) the approach taken by Mason J in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd [1982] HCA 7; 148 CLR 457, at 512, to determining whether a non-federal claim is severable:

"... it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction."

50 A key element of the applicant's pleaded case in the Federal Court was that she had been sexually harassed on numerous occasions by senior officers of the Bank. The substance of her pleaded defamation case in the Supreme Court was that the Bank had published material that was defamatory of her because the material conveyed the imputation that she had made false allegations that she had been sexually harassed by officers of the Bank. The critical factual question upon which the outcome of each cause of action depended was whether officers of the Bank had indeed sexually harassed the applicant. Both claims plainly depended on a common substratum of facts. The defamation claim therefore could have been attached to the Federal Court proceedings in that Court's accrued jurisdiction.

Power to Award Costs

51 The applicant was correct to submit that s 12 of the Cross-Vesting Act did not provide a source of power for the wasted costs order (see at [38] above). However, s 98 of the Civil Procedure Act 2005 provides ample support for the order made by the primary Judge. Section 98(1) states that, subject to the rules of court and any Act:

"(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis."

In addition, the court has power to make an order to the effect that the party to whom costs are to be paid is to be entitled to a specified gross sum instead of assessed costs: s 98(4)(c).

52 These provisions authorise a court making an order transferring proceedings from the Supreme Court to another court to make an order requiring one of the parties to pay costs incurred in the conduct of the Supreme Court proceedings. Section 12 of the Cross-Vesting Act, although not a source of power for a costs order by the transferring court, envisages that such an order may be made.

Quantum of Wasted Costs

53 It will be recalled that the primary Judge awarded the Bank wasted costs totalling $250,000, comprising:

• $200,000 in respect of discovery;
• $20,000 in respect of subpoenas; and
• $30,000 in respect of proofing of witnesses.

54 The primary Judge based his assessment of wasted costs on the unchallenged evidence of Ms Noe, a Special Counsel assisting the Bank's solicitor in the Supreme Court proceedings. Ms Noe, in her affidavit sworn on 20 October 2010, gave evidence of the total amount of billed costs in the proceedings ($1,122,853.75) and a breakdown of those costs by categories. The primary Judge accepted, as he was entitled to do, the total cost of discovery ($363,042.41), subpoenas ($112,850.56) and proofing of witnesses ($74,156.00).

55 Ms Noe gave a detailed account of the discovery process in the defamation proceedings and explained at some length why that process had resulted in costs being unnecessarily incurred. In particular, she explained why categories of discovery had been negotiated and agreed in the defamation proceedings independently of the negotiations and agreements in the Federal Court proceedings. She stated (and the primary Judge accepted) that had the defamation claims been included in the Federal Court proceedings from the outset duplication and overlap of work could have been avoided.

56 Ms Noe also explained why it was necessary for the Bank's solicitors in the defamation proceedings to duplicate work in relation to the issuing of subpoenas and the proofing of witnesses. Her explanation encompassed the steps taken by the Bank's solicitors to minimise overlap, some of which were frustrated by the failure of the applicant's representatives to agree in a timely manner to proposals put to them.

57 There was ample evidence to support the primary Judge's findings that substantial costs had been wasted by reason of the applicant's decision to commence and pursue her defamation proceedings in the Supreme Court. Indeed, the applicants' counsel expressly accepted at the hearing on costs before the primary Judge that there had been duplication in both the discovery process and the issuing of subpoenas. There was also ample evidence to support his Honour's sensible approach to quantification of the costs thrown away. He did not err by assessing these costs at $250,000.

Responsibility for Wasted Costs

58 The primary Judge accepted that the applicant was responsible for costs thrown away in the defamation proceedings because she had instituted and continued those proceedings in the Supreme Court instead of including the defamation claims in the Federal Court proceedings. His Honour did not consider whether the Bank shared the responsibility for wasted costs by not making an application itself for the transfer of the proceedings or by not engaging the same solicitors for both sets of proceedings. Had these matters been raised before the primary Judge, it may well be that a failure to take them into account could have constituted an error of law that vitiated the exercise of his Honour's discretion to make a costs order against the applicant.

59 The difficulty confronting the applicant, who was represented before the primary Judge, is that her counsel did not put the argument to his Honour. The transcript shows that the primary Judge was in some doubt as to whether he should order the transfer of the proceedings over the Bank's opposition, given the imminence of the scheduled hearing of the defamation claims in the Supreme Court. Mr Gray stated that if, contrary to the Bank's submissions, his Honour was minded to transfer the proceedings to the Federal Court, the Bank

"would press for an appropriate order apropos the enormous costs brought about by the [applicant's] choices in this litigation".

60 The following exchange then took place between the primary Judge and the applicant's counsel:

"HIS HONOUR: Mr King, first of all, the costs order, could you resist an order for costs thrown away?

KING: Costs thrown away, no.

HIS HONOUR: Well, costs lost.

KING: I wouldn't resist an order for costs thrown away."

61 Shortly thereafter, the applicant's counsel resiled somewhat from this position, submitting that a more appropriate order was that the costs of the Supreme Court proceedings be determined by the trial Judge in the Federal Court proceedings. However, counsel made no submission that the Bank bore responsibility for any wasted costs in the defamation proceedings. At one point, counsel for the applicant said that he did not accept that the reason there had been two sets of costs was the election made by the applicant to sue in the Supreme Court, but he did not explain the comment, nor did he submit that the Bank was responsible for wasted costs.

62 Later the primary Judge said that he wished to ensure that the applicant herself understood the possible costs consequences of an order transferring the proceedings. The following exchange occurred:

"HIS HONOUR: Secondly, Mr King's spoken to you, but you have heard, Ms Dye, what the [Bank's] counsel says [are] the costs to date and their claims as to the costs that would be lost by reason of the application that you make, you have heard that?

PLAINTIFF: I have.

HIS HONOUR: You understand if I was to make an order in general terms, costs lost, they would be saying that a large part of 1.2 million has been lost?

PLAINTIFF: I do.

HIS HONOUR: Mr King, what do you want to say to me about costs?

KING: We would submit that the costs should be in the discretion of the judge hearing the matter.

HIS HONOUR: I am not going to do that.

KING: Alternatively, if your Honour should order costs thrown away in the nature of an amendment order, then I have nothing further to say."

63 A reading of the transcript confirms that the applicant's counsel never submitted that his Honour should not order the applicant to pay costs thrown away because the Bank shared the responsibility for the wasted costs. Had the argument been put, the Bank may have sought to adduce evidence explaining why it had not sought an order transferring the defamation proceedings and why it decided to engage two separate firms of solicitors for the two sets of proceedings.

64 Quite apart from unfairness to the Bank, this Court should not conclude that the primary Judge erred when the matters said to vitiate the exercise of his discretion were not put to him: Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274, at [83], per Heydon JA (with whom Sheller JA and Studdert AJA agreed).

Costs of the Stay Application

65 The primary Judge ordered the applicant to pay the Bank's costs of her unsuccessful stay application. That was the usual order, made against an unsuccessful party. No basis has been shown for interfering with the order.

Conclusion

66 The applicant's challenge to the costs orders must be rejected. I propose the following orders:

1. Extend the time for the applicant to seek leave to appeal to 25 January 2011.

2. The application for leave to appeal against the orders made on 21 October 2010 that the applicant pay:

(a) the Bank's costs of the defamation proceedings which have been wasted in the sum of $250,000; and

(b) the Bank's costs of the stay application in the sum of $15,000,

be dismissed.

3. The applicant pay the Bank's costs of the application for leave to appeal.

67 PRESTON CJ OF LEC: I have had the privilege of reading Sackville AJA's judgment in draft. I agree with the orders his Honour proposes in [66]. I also agree with his Honour's reasons but wish to add two comments.

68 The first concerns the respondents' challenge to the competency of the application for leave to appeal against the costs orders on the basis of s 13(a) of Jurisdiction of Courts (Cross-Vesting) Act 1987 ('the Cross-Vesting Act'). Sackville AJA expresses the preliminary view at [42] that "it is arguable that s 13(a) of the Cross-Vesting Act should be read as prohibiting appeals from costs orders only insofar as the orders relate to the costs of the transfer application itself. If the argument is correct, s 13(a) would not render incompetent the application for leave to appeal from the costs orders." His Honour does not finally decide whether the application for leave to appeal is competent, for the reasons given in [43] - [46].

69 I agree that it is preferable not to decide finally whether the application for leave to appeal is competent. The applicant represented herself and, as a consequence, the Court has not had the benefit of full argument on the construction of s 13(a) and its application to the particular costs decision in respect of which leave to appeal is sought. A final decision is also not necessary as a consequence of the Court's decision that the applicant's application for leave to appeal against the costs decision should not be granted.

70 However, for the same reasons, I consider it is preferable not to express a preliminary view that s 13(a) of the Cross-Vesting Act prohibits appeals from costs orders only insofar as the orders relate to the costs of the transfer application. I am not currently persuaded, on the arguments that have been presented to the Court, that no other type of decision as to costs, other than an order as to the costs of the transfer application, could ever be shown to have a sufficient relationship or connection to the transfer or removal of proceedings under the Cross-Vesting Act so that it could properly be characterised as being "a decision ... in relation the transfer or removal of a proceeding" in s 13(a). I would prefer to leave the question to be decided in a future case having regard to the particular facts and circumstances of the decision under appeal and the transfer or removal of the proceedings in question.

71 The second comment I wish to make is to emphasise the restrictions the applicant faces in her application for leave to appeal against the primary judge's two decisions as to costs. The applicant needs to seek leave to appeal because of s 101(2)(c) of the Supreme Court Act 1970. The primary judge's decisions to order the applicant to pay the Bank's costs wasted by the transfer of the proceedings and of the applicant's unsuccessful stay application were made in the exercise of the discretion of the court under s 98 of the Supreme Court Act. Hence, in order to succeed, the applicant needs to overcome not only the restriction that applies to appeals from a discretionary decision as to costs but also the requirement for leave to appeal. The applicant needs to establish that the primary judge's discretion miscarried, such as by making an error of legal principle, making a material error of fact, taking into account an irrelevant matter, failing to take into account or giving insufficient weight to a relevant matter, or arriving at a result so unreasonable or unjust as to suggest that one of such errors has occurred, whether or not the error appears on the face of the reasoning: Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [45]; Wentworth v Rogers (1986) 6 NSWLR 642 at 644.

72 The applicant raised three arguments in her written submissions and a fourth argument in her oral address at the hearing as to why the primary judge's discretion to order costs wasted by the transfer of the proceedings had miscarried. The applicant's argument on the costs of the stay application was dependent on her arguments on the costs wasted by the transfer of the proceedings. For the reasons given by Sackville AJA at [47]-[65], the applicant has not established that the primary judge made any error of legal principle or any other manifest error, which would justify granting leave to appeal or upholding an appeal against the primary judge's decisions as to costs.

**********

Decision last updated: 26 July 2012