Career Employment Australia Ltd v Shepley & Ors (No 2) [2021] QSC 261

SUPREME COURT OF QUEENSLAND CITATION: Career Employment Australia Ltd v Shepley & Ors (No 2) [2021] QSC 261 PARTIES: CAREER EMPLOYMENT AUSTRALIA LTD ACN 613 305 098 (applicant/cross-respondent) v JOHN STEPHEN SHEPLEY (first respondent/cross-applicant) and PATRICK DOUGLAS PURCELL (second respondent/cross-applicant) and BRIAN JAMES DALEY (third respondent/cross-applicant) and JODIE-LEE LUCKUS (fourth respondent/cross-applicant) FILE NO: BS 3531 of 2021 DIVISION: Trial PROCEEDING: Costs ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 13 October 2021 DELIVERED AT: Brisbane HEARING DATE: On the papers JUDGE: Flanagan J ORDER: The respondents pay the applicant’s costs of the proceeding. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – DEPRIVING SUCCESSFUL PARTY OF COSTS – NATURE OF PROCEEDING – PUBLIC INTEREST OR DUTY – where a dispute arose as to the composition of the board of directors of a not-for-profit entity – where the entity has control over the allocation of public grant funds – where the court dismissed the cross-application by former directors of the entity seeking declaratory relief to the effect that they remained as directors – where the court granted the relief sought by the applicant – whether the litigation should be considered ‘public interest’ litigation – whether the court should exercise its discretion to depart from the general rule that costs follow the event -- 1 of 4 -- 2 COUNSEL: G R Coveney, with S T Lane, for the applicant/cross- respondent D de Jersey QC for the respondents/cross-applicants SOLICITORS: HWL Ebsworth for the applicant/cross-respondent Holding Redlich for the respondents/cross-applicants [1] On 17 September 2021 the Court delivered judgment in this matter.1 The Court made declarations consistent with the relief sought by the applicant, Career Employment Australia Ltd, in its amended originating application and dismissed the respondents’ amended cross-application. [2] The parties have now filed written submissions as to costs. [3] The applicant seeks the usual order as to costs pursuant to r 681(1) of the Uniform Civil Procedure Rules 1999 (UCPR) which provides that “Costs of a proceeding, including an application in a proceeding, are in the discretion of the court but follow the event, unless the court orders otherwise. ” [4] The respondents accept that the “events” were decided against them.2 That concession is properly made in circumstances where the applicant was successful in defending the cross-application and obtained relief consistent with that sought in its amended originating application. [5] The respondents, however, submit that the appropriate costs order is that there be no order as to costs. This order is sought on two bases. First, the respondents submit that the proceedings concerned a matter of public interest so as to justify departure from the usual order that costs follow the event. The public interest identified by the respondents is that the applicant provides training and support services to government programs, funds charitable services and operates several social enterprises as a not-for-profit registered charity utilising grant funds provided by external State and Commonwealth funding bodies. There was therefore a public interest in resolving the constitution of the applicant’s board in circumstances where it was the body with ultimate responsibility for the allocation of public grant funds.3 [6] The respondents refer to two decisions. In Oshlack v Richmond River Council,4 Kirby J stated: “… a discrete approach has been taken to costs in circumstances where courts have concluded that a litigant has properly brought proceedings to advance a legitimate public interest, has contributed to the proper understanding of the law in question and has involved no private gain. In such cases the costs incurred have occasionally been described as incidental to the proper exercise of public administration. Upon that basis it has been considered that they ought not to be wholly a burden on the particular litigant.” 1 Career Employment Australia Ltd v Shepley & Ors [2021] QSC 235. 2 Outline of submissions on behalf of the respondents as to costs, paragraph 3. 3 Outline of submissions on behalf of the respondent as to costs, paragraph 6. 4 (1998) 193 CLR 72, [136]. -- 2 of 4 -- 3 [7] In Oshlack the relevant provision considered was s 69(2) of the Land and Environment Court Act 1979 (NSW), which provided: “Subject to the rules and subject to any other Act: (a) costs are in the discretion of the Court; (b) the Court may determine by whom and to what extent costs are to be paid; and (c) the Court may order costs to be taxed or otherwise ascertained on a party and party basis or on any other basis.” [8] This provision differs from r 681(1) of the UCPR as there is no presumption that costs follow the event unless the Court orders otherwise. Quite apart from this difference, Gaudron and Gummow JJ noted that the issue was not one of categorising litigation as being in the public interest. Their Honours stated: “The true issue here is not whether this was ‘public interest litigation’. Rather … the question is whether the subject matter, the scope and purpose of s 69 are such as to enable the Court of Appeal to pronounce the reasons given by Stein J to be ‘definitely extraneous to any objects the legislature could have had in view’ in enacting s 69.”5 [9] The other case referred to by the respondents is the decision of Applegarth J in The Australian Institute for Progress Ltd v The Electoral Commission of Queensland & Ors (No 2),6 where his Honour stated at [38]: “The term ‘public interest litigation’ suggests that the public, or at least a section of it, has an interest in the litigation which is being pursued. It also invites the distinction between the public interest and interests of a private nature which the litigant may be seeking to advance. It prompts an inquiry whether the unsuccessful litigant did indeed pursue the interests of the public, rather than its own private interests, in bringing the litigation.” [10] I am not satisfied that the present litigation constitutes “public interest litigation”. The Court was required to determine who constitutes the duly elected board of the applicant. It was necessary in determining that issue to resolve a number of issues arising from the board meeting of 4 February 2021 which purported to adjourn the annual general meeting and the annual general meeting which was held on 10 February 2021. The resolution of these issues concerned whether the respondents remained as board members. As I observed at [126] of the Reasons: “However, when considered in the broader context of Mr Shepley’s course of conduct before and after the 4 February Board Meeting, it is evident that postponing the AGM and appointing a returning officer were only one aspect of a broader plan to fortify control of CEA and avoid losing at the election.”7 5 Oshlack v Richmond River Council (1998) 193 CLR 72, [31]. 6 [2020] QSC 174. 7 Career Employment Australia Ltd v Shepley & Ors [2021] QSC 235, [126]. -- 3 of 4 -- 4 [11] The actions of the respondents were, in my view, consistent with them seeking to maintain their positions on the board of the applicant. This is properly categorised as the respondents, at least in part, pursuing their private interests, rather than pursuing any public interest. These private interests were also evidenced by the nature of the resolutions passed by the respondents at the board meeting of 4 February 2021. As stated at [128] of the Reasons, “the Resolutions were intended to operate collectively to stifle opposition to the Board as it existed on 4 February 2021.” [12] The second basis upon which the respondents seek the Court to depart from the usual costs order is that a without prejudice offer was made on 28 April 2021. That offer required the parties to: “[A]gree that the board meeting on 4 February 2021 was valid, and the AGM of CEA Limited on 10 February 2021 was invalid, such that the board of CEA Ltd is constituted by the directors as at 4 February 2021”.8 [13] The terms of this offer do not, in my view, provide a basis for departing from the usual costs order. The applicant achieved a better result than that contemplated by the without prejudice offer. The applicant obtained a declaration that the resolutions carried by the board on 4 February 2021 were invalid, as well as an order dismissing the respondents’ cross-application. The applicant therefore bettered the offer. Disposition [14] The respondents pay the applicant’s costs of the proceeding. 8 Applicant’s submissions as to costs in reply, paragraph 15. -- 4 of 4 --