In Fisher v Houston [2013] FCA 1026 Tracey J made orders regarding the award of costs associated with an application for preliminary discovery.  The context of the preliminary discovery application relating to a potential claim under the Privacy Act 1988. I was junior counsel for the Applicant in this proceeding.

FACTS

The prospective applicant (“Fisher”) has a mobile telephone but only provided the number to a limited group of persons. In March 2012 he received a call on his mobile telephone from a journalist, the prospective respondent (“Houston”).  Houston asked Fisher for a comment about a legal proceeding in which a business associate of Fisher’s was involved [1] Fisher never provided his mobile number to Houston, nor, so far as he was aware, had any of the persons in whom he had confided the number. He was concerned that his privacy may have been breached by some third person who had, without his authority, given his number to Mr Houston. Such a breach may have contravened of the Privacy Act 1988 if the third person was acting on behalf of an organisation or an agency as defined in the Act. No contravention would have occurred if the third person was an individual acting in his or her personal capacity [2].

Fisher, concerned to establish whether or not he had a cause of action against a third party, instructed his solicitors to write to Mr Houston asking that he identify the name of the person who supplied the number to him they did this on 26 March 2012 and 5 April 2012. Houston did not respond. Fisher then filed an originating application, on 11 April 2012, seeking orders in the nature of preliminary discovery pursuant to Rules 7.22 and 7.23 of the Federal Court Rules 2011 [3].  Consent orders were made including for the filing of further affidavit material and written submissions with a hearing date fixed for 1 October 2012 [4].

Fisher’s written submissions of 9 July 2012 made it clear that  he could only succeed in his proposed action if the person who had supplied his telephone number to Houston was acting as a servant or agent of an organisation or other body covered by the Act [5]. Houston did not file an affidavit but in written submissions said that he had declined to go into evidence because to do so may have led to the disclosure of the name of the person who had supplied him with the number[6]. On 5 September 2012  Fisher swore a further affidavit in which he disclosed, for the first time in the proceeding, that he had provided the telephone number to 51 other persons. On 26 September 2012 Houston swore an affidavit deposing that he had not received the telephone number from any organisation or agency as defined in the Act and that he had obtained the number from “an individual who provided the number to me in that individual’s personal capacity”. He declined to name the individual for ethical reasons [7].

Upon being made aware that the telephone number had been supplied by an individual Fisher discontinued his application on 27 September 2012 [8].

DECISION

Fisher submitted

• that he acted reasonably when instituting, maintaining and discontinuing the proceeding. Houston could have disclosed the information sought and this refusal caused Fisher to bring an application [10].
• in the absence of a response from Houston, and following reasonable inquiries, he had a strong basis to believe that the source of the telephone number was an agency or organisation. He had no alternative but to file an application so as to determine who had interfered with his privacy [11].
• Houston was never required to disclose the name of the person who provided him with the telephone number [12]
• Houston strung the matter along by failing adequately to respond to submissions and file and serve documentation on time. His failure to disclose the information until the eleventh hour was a tactical decision given that no act, fact, matter or thing changed between March 2012 and September 2012 which would warrant a good faith change in attitude [13].
• he acted reasonably by promptly discontinuing the application following receipt of  Houston’s 26 September affidavit and  notified Houston of this decision at the earliest opportunity [14].

Houston submitted:

• that he was under no obligation to volunteer information relating to the identity or character of the person who provided Fisher’s telephone number and that such an entitlement would only have accrued if Fisher was successful in his application for preliminary discovery [15].

• that he was subject to ethical and professional constraints  & only following receipt of Fisher’s second affidavit, in which he deposed that his telephone number had been confided in some 51 persons, was he able to disclose that the source of the information was an individual acting in his or her personal capacity [16].

His Honour set out the relevant principles as:

• the Court has the power to award costs against a party under sections 37P and 43 of the Federal Court of Australia Act 1976 [17].
• the power to award costs is a discretionary power to be exercised judicially [18]
•  ordinarily, costs follow the event but where proceedings are discontinued before hearing, the court should not determine costs by engaging in a hypothetical trial [19]
• the Court may be able to make a costs order in favour of one party or against another in the absence of a hearing [20]:

(i) where the Court is able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action, and
(ii) where the parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. Such cases are likely to be rare.

In this  case his Honour said “..a broader range of considerations will inform the Court’s exercise of discretion” including [21]:

•  whether the proceedings were reasonably commenced;
• whether, in all the circumstances, the parties’ conduct in maintaining and defending the proceedings was reasonable; and
• the nature of the applicants’ reasons for seeking to discontinue the proceedings.

His Honour regarded the proceedings as being reasonably commenced [24].  Fisher sought the information before making application, he had his solicitor write to Houston twice to obtain the information and Houston was unwilling to co operate (see [22] – [23]).

His Honour found that until Houston received Fisher’s 9 July submissions he was entitled to believe that what Fisher wanted was the name of the individual who had made the disclosure but after that date [27]:

“..it was clear that Mr Fisher’s proposed action depended fundamentally on the capacity in which Mr Houston’s informant had acted. From this point on there was no reason why he could not have filed an affidavit which dealt with that issue in the terms contained in the affidavit which was filed on 26 September 2012.”

His Honour found that Fisher acted promptly by filing a Notice of Discontinuance [29].

In the circumstances his Honour ordered, at [30]:

“..Mr Houston pay Mr Fisher’s costs of the application incurred after 16 July 2012. I have fixed this date to take account of the need for Mr Houston to consider and take advice on his position after receipt of Mr Fisher’s written submissions and to prepare and file an affidavit.”

ISSUE

 The fact a party discontinues is not determinative of costs being awarded against that party.  The court set out the relevant factors, one of which is the conduct of the parties.

This decision, while on the question of costs, highlights that an individual has  scope to bring an action under the Privacy Act 1988 where there is a potential misuse of personal information by organisations and/or agencies.  Under the Act that invariably involves relying on section 98.  That permitted the preliminary discovery application being made in this case.